Mumbai, Nov 28: Several global liquor companies, through their Indian industry group, have filed a lawsuit challenging the latest excise-duty regime imposed by the state of Maharashtra. The petition submitted by the International Spirits and Wines Association of India (ISWAI), which includes the Indian arms of Diageo and Pernod Ricard demands that a Mumbai court declare the policy invalid or allow foreign-invested firms to access the lower-tax “Maharashtra Made Liquor” category.
What Triggered the Legal Challenge
Earlier this year, Maharashtra introduced a lower-tax category called “Maharashtra Made Liquor,” offering a 270 % excise duty rate but only to companies headquartered in the state with no foreign ownership.
At the same time, the state sharply increased excise duties on “affordable premium” spirit brands whose production cost is under ₹260 per litre raising the tax from 300 % to 450 %.
These changes hit major brands such as Diageo’s flagship whisky, and firms under Pernod Ricard, as well as other producers reducing their competitiveness in Maharashtra’s lucrative liquor market.
Industry’s Argument: “Unfair Trade Barrier”
In its court filing, ISWAI argues that the new tax regime unfairly favours a select group of local companies and imposes a “trade barrier” by artificially disadvantaging foreign-invested firms. The industry group has asked the court either to strike down the regulation or extend eligibility for the lower-tax category to all firms regardless of ownership.
Meanwhile, data from industry associations suggests that sales of impacted brands have dropped by 35–40 % in recent weeks a major blow to companies that depended on Maharashtra for a significant share of their premium-spirits business.
Government’s Stand: Policy Aimed at Boosting Local Industry
The Maharashtra government defends the policy as a deliberate effort to revive local distilleries, create jobs, and attract fresh investment. Officials estimate the revised excise structure could generate an additional $1.56 billion in revenue annually.
What Happens Next
A hearing in the petition filed by ISWAI is scheduled at the Bombay High Court on December 9. The court’s decision could determine whether the “Maharashtra Made Liquor” policy remains in force and whether foreign-backed firms in India will get access to the preferential lower tax bracket.
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