Vijayawada: The state govt has sparked a debate over regulatory control of industrial alcohol following a high-profile seizure linked to illicit liquor production. Inspired by Andhra Pradesh‘s decisive action, several states are preparing to push the Centre for jurisdiction over industrial alcohol — a domain traditionally under central authority. AP recently invoked a Supreme Court ruling to file criminal cases against individuals illegally transporting spirit intended for spurious liquor.In a major crackdown recently, excise and prohibition officials arrested 36 individuals and seized over 2,232 litres of diverted spirit, alongside counterfeit liquor bottles and packaging materials. Investigations unearthed a well-organised supply chain: spirit obtained under industrial pretenses like hand sanitizer production was rerouted for illegal liquor manufacture. Two repeat offenders confessed to sourcing ethanol via a Telangana-based pharma firm exploiting its RS-III license and pandemic-era permissions. The company—granted temporary sanitizer production rights during Covid-19 — allegedly misused them by diverting undenatured ethanol to operators in Andhra Pradesh.The network extended beyond Andhra Pradesh, with supporting materials like empty liquor bottles, brand labels, and caps being procured from Mumbai-based vendors— underscoring its scale and sophistication The Palakollu case prompted other states to seek input from AP authorities, who have since been approached for guidance and invited to lead a seminar on regulatory powers over industrial alcohol.However, the issue took a new twist after the arrival of GST regime. While the states continue to demand for control, the Centre made it clear that it has complete power to regulate, tax and penalise industrial alcohol. The states got the final relief with the latest Supreme Court judgement in Uttar Pradesh Vs Lalita Prasad and others case in 2024. A judgement by a nine-member judge (Constitutional bench) finally said that states would continue to have power on industrial alcohol to regulate the mechanism of supply of alcohol to industries and also potable alcohol.
