SHILLONG, JUNE 2: The Meghalaya government has defended its excise reforms and the rollout of the Integrated Excise Management System, saying the measures are aimed at transparency, revenue protection, and aligning with national regulatory trends, even as liquor retailers continue to raise objections over reduced profit margins.

In a statement issued on Tuesday, the Excise, Registration, Taxation & Stamps department said it had “taken note of recent statements made by certain associations of liquor retailers regarding the Integrated Excise Management System (IEMS) and the rationalisation of retailer margins.”

The department added that “several claims being circulated are selective, incomplete and fail to present the larger public interest, fiscal realities and national regulatory context within which these reforms are being undertaken.”

The government stressed that Meghalaya’s steps are consistent with modernisation drives across the country.

“Across India, state governments are increasingly modernising excise administration through QR-based bottle tracking, digital inventory management, stricter compliance systems, supply-chain monitoring, structured pricing frameworks, and enhanced revenue protection measures,” it said.

“States such as Delhi, Karnataka and several others are presently undertaking major excise reforms focused on transparency, digitisation and tighter regulatory oversight.”

The department noted that in many states retailer margins are tightly capped, commission structures are fixed by government, or liquor retail is directly operated through State corporations citing Tamil Nadu’s TASMAC model and Delhi’s move toward stronger government control.

On IEMS, the government said the system was introduced “primarily to modernise Meghalaya’s excise ecosystem and strengthen transparency and accountability across the liquor supply chain.”

Its key objectives include “prevention of illegal diversion and pilferage, curbing circulation of counterfeit liquor, plugging revenue leakages, strengthening enforcement capabilities, ensuring proper stock accountability, and protecting consumers and legitimate businesses.”

The department said several digital services and online permits are already operational and that “digitisation is not intended to burden lawful retailers but to create a transparent and technology-driven regulatory framework in line with evolving national standards.”

Excise revenue, the government said, “constitutes a major component of the State’s own tax resources and directly supports developmental expenditure and public welfare programmes.” It pointed to “past audit observations” that highlighted “deficiencies and leakages within excise administration systems, including non-realisation of duties and weaknesses in monitoring mechanisms,” adding that “the government would have been failing in its responsibility had it not introduced stronger systems for monitoring and transparency.”

Addressing the cut in retail margins, the Department clarified that the revision “was not an isolated decision targeting retailers, but part of a broader restructuring exercise concerning the excise supply chain and pricing framework.”

The reforms, it said, aimed at balancing “sustainability of the retail system, consumer affordability, revenue considerations, and long-term regulatory stability.” After the revision, the maximum retail margin stands at 15.5%, down from 20% earlier.

“The retailers in Meghalaya enjoy significant profit margins as compared to other stakeholders and the retail margins are also one of highest when compared with retail margins in other states,” the government said. It cited data showing West Bengal at 7%, and Karnataka and Tamil Nadu at 10%, while adding that “even in Meghalaya the Bonded Warehouses can charge as per the current policy a maximum of 8% and the Central Bonded Warehouses can charge only a maximum of 5.5% profit margin.”

The department reiterated that “trade in liquor is not an unrestricted commercial activity but a highly regulated sector governed under the authority of the state government in the interest of public welfare, revenue protection and lawful administration.” Therefore, it said, “excise policy cannot be determined solely by private commercial considerations” and “public interest must prevail over pure commercial considerations.”

The State, it added, has a larger obligation toward “public health and safety, consumer protection, prevention of illicit liquor trade, strengthening lawful compliance, and safeguarding public revenues.”

The government said it “fully respects the observations and directions of the Hon’ble High Court and is examining the matter appropriately within the legal framework.” It also maintained that the “Excise department remains open to constructive dialogue and engagement with all stakeholders, including retailers, distributors and industry representatives, to ensure smooth implementation of reforms and continued stability within the sector.”

The statement concluded that “the government of Meghalaya remains committed to building a transparent, accountable and technology-driven excise administration that balances lawful business interests with fiscal responsibility, consumer protection and larger public welfare.”

Also Read: Meghalaya CM meets stakeholders, assure inclusive growth and responsive governance

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