increasing revenue and curbing illegal liquor in india

Diverse technologies, common goal.

© 2014 ASPA (formerly known as HOMAI) www.homai.org

Increasing Revenue and Curbing Illegal Liquor in India

Presented by:

Manoj Kochar

President

Authentication Solution Providers’ Association

(Formerly known as Hologram Manufacturers Association of India)

Tax Stamp Forum, Dubai: 16th September 2014



About ASPA

• Authentication Solution Providers’ Association

(Formerly known as Hologram Manufacturers Association of India)

• Formed in 1998, renamed as ASPA on 5th July 2014

• Has a strength of 26 Manufacturing, 12 Associate and 5 Honorarymembers

• Mission : To provide a platform where authenticationtechnology providers can converge and collaborate todevelop customised cutting edge authentication solutionsfor their customers



Indian Tax System

Central (Federal) Government

Custom Duties

Income Tax

Manufacturing Tax

(Central Excise)

Liquor Excise

Sales Tax/VAT

Municipal Taxes

State (Province) Government



Various States in India



Liquor Tax Stamps currently in use

• The first tax stamp appeared in 1980’s on a thin glassine basedpaper

• Even today no Tax Stamps at all for some states

• The ones that are in the market

Paper based labels with a hologram strip

Full OVD hologram label also called HEAL -

Hologram Excise Adhesive Label



Initial Challenges and Redressal

• High level of initial resistance

Does the technology work?

Hologram companies’ credibility, capacity?

Public acceptance and recognition?

Bottlers were not keen to adopt

• Hologram on other government issued documents such as VotersIdentity Card, Driving Licence helped

• Positioning – not a panacea but a potent tool to help identificationof illicit liquor

• The industry invested to build up capacities

• Pilot projects conducted for bottlers

• Stress on overt features



Evolution of HEAL

• The first hologram stripe on a Paper based Tax stamp appeared in1998

• The first OVD Hologram Excise Adhesive Label (HEAL) appeared in1999

• Teething Problems

o Implementation issues at the Departmental level

o Hologram affixing, Bottler education

• Gradually all the stakeholders realised the benefits, and then gavetheir wholehearted support



Technology currently seen on HEAL

• Combination origination techniques

o Classical 2D/3D

o Dot Matrix

o High resolution Litho

• Substrates

o Multi coloured bespoke security Films

o Customised tamper evidence

• Conversion

o Demetallization

o Security Inks

o Taggants

o Serial Numbers



Technology - Paper based Labels

• Combination origination techniques

o Classical 2D/3D

o Dot Matrix

o High resolution Litho

• Substrates

o Security papers with UV Fibres

o Customised tamper evidence

• Conversion

o Demetallization

o Security Inks

o Intaglio print



Typical Transaction Cycle for HEAL

• Department invites RFQ; selects vendor

• Vendor sets up a Numbering unit under Excise departmentsupervision

• Vendor produces holograms at existing facility and supplies theHEAL to the Numbering Unit Numbering/Coding under Departmentsupervision

• Supply to bottlers only after specific approval of the Department

• Bottlers affix the HEAL

• Only the bottles with the HEAL are saleable

• HEAL serves as the identifier for public and authorities

• Departments conduct awareness campaigns



Awareness Campaign in Madhya Pradesh

• Such Posters were put up at most of the liquor vends to create awareness of the HEAL

• Some states also conducted mass media campaign



Market Coverage

ArunachalPradeshJammu

& Kashmir

Himachal

Pradesh

Delhi

Assam

Punjab MeghalayaUttrakhand

Uttar

Pradesh

Haryana

SikkimRajasthan Nagaland

Bihar

JharkhandManipur

MadhyaPradesh

WestBengal

MizoramGujarat

Chhattisgarh

OrissaMaharashtra Tripura

Goa

Karnataka Andhra Pradesh

Telangana

Kerala Tamil Nadu

Puducherry

State usingHEAL(12)

State usingPaper based

label with

OVD (5)

Potential (11)

State usingFilmic label (1)



Case Study – Tamil Nadu

Reven

ue in

mil

US

D

402 431 439 483 496 389599

746936

1,1191,352

1,5831,906

2,343

2,848

3,398

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

(B

E)

Tamilnadu

HEAL Introduced

All exchange rates frozen as of March 1998



Case Study – Madhya Pradesh

Reven

ue in

mil

US

D

227 252 229165 209 255 280 322 363

435541

693

846

1,014

1,193

1,350

0

200

400

600

800

1,000

1,200

1,400

1,600

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

(B

E)

Madhya Pradesh

HEAL Introduced




Case Study – Uttar Pradesh

Reven

ue in

mil

US

D

383499 526 461

600 581 631725

834927

1,109

1,331

1,579

1,912

2,298

2,735

0

500

1,000

1,500

2,000

2,500

3,000

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

(B

E)

Uttar Pradesh

HEAL Introduced




Am

ou

nt

in m

il U

SD

STATES USING HEAL/OVD ON THEIR TAX STAMPS

STATES NOT USING TAX STAMPS

2,249

1,941

1,667

913

506 458

0

500

1,000

1,500

2,000

2,500

Tamilnadu Karnataka Uttar Pradesh Madhya Pradesh Bihar West Bengal

Comparison in Revenue Growth From 2005 to 2013




Road Ahead

• Practically all the remaining states are at various considering adoption of HEAL/OVD based Tax Stamps

• We believe that by 2016 all the states should have kind of Liquor Tax Stamp in place

• Track and Trace based HEAL



Implementation of Track and Trace Based System



ASPA Role

• Keep an eye on suspicious activities

• Help in conducting raids

• Collect data from the States and process the same

• Publish reports

• Conduct Press campaigns and mobilise public opinion



Press Clippings



Conclusion

• Almost 75% of all tax stamps in liquor are OVD hologram Based

• Almost 15 billion tax stamps used every year

• Reduction in cases of illicit liquor - leading to protection of human lives and increase in Government revenue

• OVD Hologram based Tax Stamps WORK!!



Thank You

For more information, please contact

increasing revenue and curbing illegal liquor in india

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