Delhi is one of the biggest liquor markets in India, with a population of 200 million. Alcohol has always remained in high demand in the territory and is considered one of the main sources of income generation. Recently, the Delhi government amended its excise act.
The Delhi excise act is an ordinance that consolidates amends and updates the Excise Laws relating to manufacturing, import, export, transport, possession, purchase, sale, etc, of liquor and other intoxicants, in the National Capital Territory of Delhi. In the new financial year, the state called out for reformations to improve the city’s liquor business by upgrading the user experience, eradicating theft, and cleaning up the liquor mafia.
Since its announcement, the policy has witnessed many petitions against it, claiming it illegal, unfair, arbitrary, and violative of the Delhi Excise Act of 2009. To date, 8 petitions have been filed against the policy. The arguments raised against the policy are:-
1. Firstly, it divides Delhi into 32 zones, which implies that only 16 players could be permitted in the market which would lead to monopoly. In reply to this, the court spoke that, the control was meant for public welfare and doesn’t mean to harm those in the business.
2. Ashiana Towers and Promoters Pvt Ltd and Rajiv Motors Pvt. Ltd challenged the policy alleging that it is illegal, unfair, arbitrary, and violative of the Delhi Excise Act of 2009. Counsel Satyam Khetarpal, appearing for both companies questioned the theory of 32 zones.
3. Anita Chaudhary, a wholesale licensee of liquor in Uttar Pradesh also challenged the policy. Advocate Sanchar Anand, on behalf of Chaudhary, argued that policy is beyond the rule-making power of the government under the Delhi Excise Act and violates Article 14 of the Constitution of India. The court issued notice to the Delhi government in this matter, which will be heard on 27th August 2021.
4. Representing the Delhi government, senior advocate Abhishek Manu Singhvi stressed that the policy aims to minimize corruption, eliminate cartelization give fair competition in the liquor trade.
The Delhi government in its affidavit filed by counsel Santosh Kumar Tripathi stated that the committee or the group of ministers (GoM) was set up by the Delhi government to receive suggestions about ending the disparities between business practices carried out in Delhi and neighboring cities such as Gurugram, Noida, and Faridabad. It was also mentioned that "the state would ensure sufficient checks and balance which are in place viz. age profiling of the people who are placing order vide proper check of government-issued identification."
The GoM which was constituted by the Delhi cabinet on 5th February 2021, went through all aspects of the current system, the reports from the expert committee, and other suggestions. It later recommended that the drinking age in Delhi should be brought in line with other states of India, like Uttar Pradesh, Assam, Odisha, and so on.
The new features of the New Excise Policy are mentioned below.
The new legal drinking age - earlier, Delhi was one of the six states where the legal age for drinking was 25. These states and union territories were Punjab, Maharashtra, Haryana, Chandigarh, Daman and Diu, and Dadar & Nagar Haveli. In December 2020, a committee was set up by the government which recommended reducing the age from 25 to 21. With this change, the expected annual revenue is said to be increased by 20%.
To strengthen its rules, the government will also introduce the system of "age-gating" in the city, wherein people below 21 years will not be allowed to enter pubs or clubs that serve liquor by themselves.
Govt-run liquor shops to close down in capital - according to the new rules, no new liquor shops will be opened in the capital. Also, there was a huge gap in income generation of private liquor stores and the government-owned due to which they decided to shut down all its shops. The Delhi government's move to exit ownership of liquor stores is bound to lead to the proliferation of private outlets.
The one-time P-10E license fee - to serve liquor, party places, banquet halls, farmhouses, wedding venues will be charged INR 50,000 for the one-time P-10E license if the concerned venue does not have a regular license.
Boosting micro-brewery - Draught beer, also spelled as a draft, is beer served from a cask or keg rather than from a bottle or can. The new rules will allow draught beer to be taken away in bottles or growlers (glass jugs to carry fresh draft beer). But when served as takeaway, clear signage and information will need to be put up about its short life and the bottles will have to mention expiry date.
It will help in boosting the micro-brewery industry, as draught beer can also be served at events like wedding functions and parties that have sought a license to serve liquor to their guests.
New rules for liquor shops - the new rules have also specified guidelines for the size and location of liquor shops. According to it, liquor shops in Delhi will be allowed to open only if they are set up in a space of 500 sq. ft, also windows of such stores should not face the road.
Check on international standards of liquor - the reforms also allow the set up of an international standard check-up system to keep a watch on low-quality liquors and stop their distribution. To enable this, an international quality lab will be set up to test the quality of liquor coming into the city.
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