A Delhi government committee headed by Public Works Department (PWD) minister Parvesh Verma on Friday, October 3, reviewed the Capital's excise tax structure and maximum retail prices (MRPs) of liquor, according to Zee Business sources. The panel has been tasked with drafting a new excise policy, expected within the next two months, in a bid to boost revenues and curb cross-border sales.

Delhi losing buyers to Gurgaon, Noida and Faridabad

Officials said Delhi has been losing a significant share of liquor sales to neighbouring cities such as Noida and Ghaziabad in Uttar Pradesh, and Gurugram and Faridabad in Haryana. The price difference - often running into hundreds of rupees on premium labels - has been a key driver of the outflow.

"Excise tax rates in Delhi have not been revised since 2014, while MRPs were last updated three years ago," an official source said. "Aligning these with current market realities will help Delhi retain its customers and generate higher revenue."

Industry officials cited the example of Black Label whisky, which can sell for around Rs 3,500 in Delhi but is available for close to Rs 2,400 in Gurugram. "It's not about Indian brands - the main gap is in premium foreign liquor, where Delhi loses customers to the NCR," sources reported.

Premium brands missing from shelves

The panel also discussed the limited availability of premium imported brands in Delhi. Since the previous policy was scrapped in November 2021, only government-run shops have been permitted to sell liquor.

Sources said these outlets often avoid stocking higher-priced labels, focusing instead on mid-range bottles priced between Rs 400 and Rs 600. "The fixed retail margin - capped at Rs 50 per bottle on Indian Made Foreign Liquor and Rs 100 on imported brands - discourages shops from keeping premium products".

In contrast, Haryana follows an auction model where traders bid for licences at high reserve prices - around Rs 20 crore or more but then gain flexibility to offer discounts and promotional pricing.

Draft policy under preparation

The draft of Delhi's new liquor policy is likely to be finalised within a month and put out for public consultation. Once cleared by the Cabinet and the lieutenant governor, it will be notified.

Chief Minister Rekha Gupta has said her government is committed to framing a "transparent and socially responsible" excise regime that also secures higher revenue for the exchequer.

The panel has already held four rounds of consultations with manufacturers, retailers and other stakeholders. Issues discussed include retail margins, excise duty, legal drinking age and the potential return of private liquor vends alongside government outlets.

Legal drinking age unlikely to change

One proposal examined was lowering the legal drinking age for beer from 25 to 21 years. However, members could not reach consensus, sources reported that the current age limit is likely to stay in place.