30.26 crore litres of ethanol imported into Kerala in 2024: Minister
Kerala loses over ₹100 crore annually in GST revenue due to ethanol imports, Excise Minister M.B. Rajesh told the Assembly. In 2024, 30.26 crore liters of ethanol were imported for petrol blending. The Minister defended allowing a liquor plant in Palakkad, emphasizing job creation and revenue. Water for the project will come from Malampuzha Dam, not groundwater.
Kerala is, as per conservative estimates, losing over Rs 100 crore annually in Goods and Services Tax (GST) revenue due to the import of ethanol for petrol blending and industrial use from other states, including Karnataka and Maharashtra, Excise Minister M.B. Rajesh informed the Assembly on March 3, 2025.
In response to questions, he explained that this revenue loss could be prevented by production within the state. The Question Hour turned into a debate between the Minister and Opposition MLAs regarding the government’s decision to permit a major liquor company to set up manufacturing units in Palakkad district.
Rajesh stated that in 2024, four major petroleum companies imported 30.26 crore liters of ethanol into Kerala. Additionally, industrial ethanol is being imported, though figures for this are not yet available. Ethanol used for petrol blending is subject to a 5% GST, but there is no GST on liquor or spirits meant for human consumption.
In 2024, Kerala imported 9.21 crore liters of spirit (extra neutral alcohol) for liquor production. Of this, 2.68 crore liters were sourced from Maharashtra-based companies, with Karnataka-based companies coming in second. In response to a question, the Minister pointed out that some of these companies are run by Ministers and MLAs in those states.
“The government’s goal is to generate jobs, attract investment, and boost the state’s revenue. Why is the Opposition so determined to ensure we continue importing spirit from other states? Our policy aims to stop the state from suffering such revenue losses,” he remarked.
The Minister also clarified that Oasis Commercial Private Limited applied for permission to set up a liquor manufacturing plant on November 30, 2023, and the government gave preliminary approval only on February 16, 2025, after thorough scrutiny. No meetings with company officials have been held by the government.
He assured the Assembly that groundwater would not be used for the project, as water would be sourced from the Malampuzha Dam through the existing KINFRA Water Supply Scheme for industrial purposes, which was initiated during Oommen Chandy’s tenure as Chief Minister. Additionally, rainwater harvesting will be used, with 10 Million Litres per Day (MLD) of water currently being provided to KINFRA.
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Source : Chinimandi
