Kalahandi cash recovery brings tax lens on country liquor trade in Odisha

Sources said there are over 500 OS liquor manufacturing units operating in the state.
Stashing of such a huge volume of cash is not uncommon as the out still (OS) liquor business is a cash-rich trade and flourishing in Odisha for decades.
Stashing of such a huge volume of cash is not uncommon as the out still (OS) liquor business is a cash-rich trade and flourishing in Odisha for decades. (File | Reuters)
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BHUBANESWAR : Kalahandi police which seized a whopping `3.51 crore robbed by a gang of eight criminals from a country liquor manufacturing unit at Dharamgarh in Kalahandi district late on January 30 night has now intimated the Income Tax (I-T) department to look into the source of the huge volume of cash.

“Our task was to recover the loot and catch the criminals which we did within 24 hours of the incident. I-T department has been intimated about the cash and it is their area to probe,” Kalahandi SP Abilash G told The New Indian Express on Monday.

Stashing of such a huge volume of cash is not uncommon as the out still (OS) liquor business is a cash-rich trade and flourishing in Odisha for decades. Many of the manufacturing units exist even before Independence.

Sources said there are over 500 OS liquor manufacturing units operating in the state. At least 30 big players control majority of the trade while there are about 150 small manufacturers engaged in the business. On an average, each major player owns and runs eight to 25 units and small manufacturers have one to two units. The heist at OS liquor outlet in Dharamgarh is licensed to M/s Laxminarayan Manmohan Lal, one of the largest operators in the area.

Government-licensed country liquor is a massive excise revenue churner for the state. If sources are to be believed, the Excise department logged revenue to the tune of `770 crore last year from OS liquor businesses spanning across 22 districts of the state.

Apart from Balasore, Bhadrak, Kendrapara, Jagatsinghpur, Jajpur, Cuttack, Khurda (including Bhubaneswar), Puri and Nayagarh, country liquor units are operational in all the remaining districts of the state most of which are tribal-dominated.

The revenue comes from storage and transport of Mahua flowers - the key raw material - as well as fee towards manufacturing of country liquor at the out still units. Country liquor manufacturers do not directly buy Mahua flowers, instead purchase it from the traders who collect it from the tribals.

Though country liquor business is highly profitable, its regulation is far more complex than that of IMFL trade because of its supply and value chain. The Excise department does not have resources to monitor the trade. While one officer is deployed for 25 IMFL bottling units on a regular basis, it is not the case with OS liquor units. In many instances, people running the country liquor units do not even apply for licences in their own names, said sources.

Another grey area is the entire business is completely cash driven as the out still liquor units are engaged in sale as well. The consumers of country liquor pay in cash and manufactures barely reflect the accurate transactions because a billing system does not exist in the rural pockets where these businesses cater to.

“This also means beyond the official record of raw materials, manufacturers produce and sell much more than their installed capacity well aware that the system is extremely porous,” said the sources.

However, a senior officer of the Excise department maintained that a close vigil is kept on the country liquor business in the state. “Monthly inspection is being carried out at OS liquor units and mahua flowers are issued to them twice a month,” said Excise commissioner, Narasingha Bhol.

He also informed that three OS units were fined over `30 lakh each last year for various irregularities.

In 2023, the Income Tax department raided Boudh Distillery Private Limited and several other alcohol manufacturing firms, many of which were inter-linked, over allegations of tax evasion and had seized `351 crore in cash.

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