The hotel industry in Maharashtra is fearing a collapse following the state government's decision to increase excise duty by a whopping 60%. The move has sparked concerns among the hospitality businesses which believe that the industry in the state is being pushed to the brink by soaring taxes. President of the Indian Hotels and Restaurants' Association (AHAR) president Sudhakar Shetty said running of bars will become unviable because of the steep hike in levy. Sources in the police force said illicit distillation will receive a boost since most people cannot afford liquor anymore.
On June 10, the state cabinet approved a hike in liquor rates across the state to generate an additional Rs 14,000 crores annually through increased excise duty and taxes. The revised structure includes an increase in the duty on Indian-made foreign liquor (IMFL) from 3% to 4.5% and excise duty on country liquor to increase from Rs 180 to Rs205 per litre. The change is expected to increase the retail price of liquor by an average 60%.
Following this structure, the new minimum retail prices for a 180 ml bottle have increased by 14.28% from Rs70 to Rs80 for country liquor. Similarly, the cost for IMFL will increase by 70.83% from Rs120 to Rs205 and premium foreign liquor will increase by 9% from Rs330 to Rs360 while the newly introduced Maharashtra-made liquor’s cost will start from Rs148.
The move is seen as the latest blow of back-to-back financial shocks to the hospitality industry in the last one year. The state government increased the value added tax (VAT) on liquor from 5% to 10% and also increased the licensing fees for the financial year 2025-26 by 15%. Representatives of AHAR said unprecedented tax hikes will lead to large scale unemployment while also affecting tourism.
Describing it as nothing short of a “tsunami of unjust levies,” AHAR warned that the recent policy decisions by the state government are pushing the industry towards collapse, jeopardising both livelihoods and the state’s aspirations of becoming a global tourism hub. It claimed that with rising costs passed on to consumers, the affordability of services in the sector is under threat, endangering both the sector's future and the livelihoods of millions. Members of AHAR have expressed strong displeasure over the government’s policies and many of them fear that they will not be able to continue operations under such pressure.
The hospitality industry in Maharashtra comprises over 19,000 legal permit rooms and lounge bars, with the number growing at an annual rate of 8%. It directly employs more than four lakh individuals and supports around 48,000 vendors. Additionally, approximately 18 lakh people are indirectly dependent on this sector for their livelihoods.
Appealing to the government to immediately roll back the tax hikes, Sudhakar Shetty said “This is not just an economic blow, it is a death blow to an industry that contributes significantly to employment and state taxes. These draconian hikes are the final nail in the coffin. Our members are devastated and staring at a bleak future. From excise renewal fees hike to an unprecedented hike in VAT and excise duty, our survival itself has become a question mark.”
AHAR pointed out these unjust tax hikes will have far-reaching consequences as tax evasion and corruption will rise as liquor from neighbouring states will make its way into the state through illegal channels. It claimed that these policies will prove to have a negative effect on domestic and international tourists as they will be driven to more affordable states.
Expected New Price Of IMFL ( Rs per 60 ml)
Old Monk Rum
Earlier- 150
New- 230
Bacardi Rum
Earlier- 280
New- 470
Signature Whisky
Earlier- 260
New- 400
Red Label Scotch Whisky
Earlier- 380
New- 420
Smirnoff Vodka
Earlier- 270
New- 410
Absolut Vodka
Earlier- 360
New- 400
Blue Riband Gin
Earlier- 150
New- 230
Bombay Sapphire Gin
Earlier- 430
New- 470
