Liquor To Soon Be Available In Ladakh's Tourist Spots

Sale of hard liquor will be allowed in Ladakh, as well as in retail vends in guest houses and homestays have been permitted as part of a new excise policy approved by Governor Vinai Kumar Saxena.

The policy aims to curb the growing dependence on narcotics and drugs and giving people a wider choice of low alcoholic content liquor in Ladakh region. The policy also seeks to optimise excise revenue, while balancing public convenience, tourism promotion, revenue optimisation and effective and efficient regulation of liquor trade.

Key reforms approved under the new policy are:

• Sale of hard liquor, including foreign liquor and Indian-made foreign liquor (IMFL), is now permitted through retail vends. Earlier, only beer, wine and Ready-to-Drink (RTD) beverages were permitted for retail sale through vends.
• Excise duty rates have been rationalised for liquor, beer and wine.
• For the first time, retail vend of liquor has been permitted in guest houses and homestays, on payment of requisite licence fees. Earlier, only hotels were permitted to serve liquor.
• For the first time, beer bars with micro-breweries will be allowed in Ladakh.
• To improve accessibility and ensure regulated availability, 20 liquor vends to be opened through e-auction. Earlier, only two liquor vends were operational in Ladakh.
• Liquor will now be available in new districts - Nubra, Changthang, Sham and Zanskar - providing greater accessibility to tourists. Earlier, liquor was only available in Leh city.
• Consumption of liquor is now allowed within the hotel premises, including in the rooms. Earlier, liquor consumption was restricted to bars only.
• Number of documents required for obtaining excise licence, reduced to just six. Earlier, 16 documents were required.
• The requirement of the "Opinion" of District Administration for grant of licence is now removed. Earlier, "Opinion" of District Administration was mandatory and used to take several months.
• Permission granted to serve liquor on special occasions at private places, after paying the requisite fee. Earlier, it was not allowed.
• Permission granted to serve liquor in banquet halls/party halls, etc. on specific occasions after paying the requisite fee. Earlier, it was not permitted.
• Manufacturers shall now be permitted to undertake wholesale distribution of liquor, thereby encouraging the availability of quality brands and improving supply chains. Earlier, this provision was not in place.
• A simplified duty structure has been introduced with a single duty framework at wholesale and retail levels. Earlier, multiple duty structures at wholesale and retail levels.
• A uniform excise duty of Rs 500 per LPL has been prescribed across all IMFL brands, to prevent revenue leakage and simplify administration.

In order to optimise the excise revenue, the annual fee for the wholesale license has been increased from the existing Rs 3.5 lakh to Rs 5 lakh. The base price for retail vends too, has been revised. The base price In Leh Municipal wards have been fixed at Rs. 60 lakhs, while in other areas, they have been fixed at Rs 30 lakh. The profit margin of retailers too has been reduced from the existing 12 per cent to 10 per cent.

Further, in the existing regime, tourism registration was mandatory for hotels to get liquor license. But now, only GST registration will be sufficient for getting an excise license. But hotels that are not registered in GST would be required to furnish FSSAI or tourism registration.

The excise policy also incorporates robust enforcement and consumer protection measures. Stringent penalties, including cancellation of licence and forfeiture of EMD, have been prescribed against retailers selling liquor above the Maximum Retail Price (MRP).

To prevent excise duty evasion and strengthen traceability, manufacturers and importers shall be required to affix security holograms approved by the Excise Department on liquor products. Considering the environmental concerns, the new policy also prohibits sale of liquor in plastic bottles and provides that liquor shall be sold only in approved glass bottles, PET bottles and tin cans.

A key feature of the new excise policy is the liberalisation of the existing restrictive regime, which had resulted in limited availability of brands and outlets and thus created an "artificial scarcity" that often deterred the tourists visiting Ladakh. This often prompted tourists to carry liquor with them from outside the Ladakh region, also causing revenue loss to the Union Territory. The policy seeks to address this "artificial scarcity" by expanding lawful supply channels while maintaining strict regulatory oversight.

The new policy prescribes the licensees to employ any person above 21 years of age to assist in liquor business, thereby increasing employment opportunities for all.

The policy further provides that retail vends shall be established only after ensuring compliance with prescribed norms relating to a 100-meter distance from religious places, educational institutions, hospitals and public parks, in accordance with Government of India guidelines.

The new policy comes after extensive meetings with civil society organisations, NGOs, religious organisations, public representatives and government officials in recent months. One of the major concerns raised in these meetings was the increasing dependence on narcotic substances and psychotropic drugs, particularly due to the unavailability of hard liquor in Ladakh, prompting individuals to resort to illegal narcotic substances and smuggled and spurious liquor.