This document discusses the use of tax stamps and authentication technologies in India to increase liquor tax revenue and curb illegal liquor. It provides an overview of the Authentication Solution Providers' Association and how they have worked with state governments to implement hologram-based tax stamps. Implementation of these stamps has led to significant increases in tax revenue for states like Tamil Nadu, Madhya Pradesh, and Uttar Pradesh. The document advocates for expanding the use of track-and-trace technologies in tax stamps to all states by 2016 to further reduce illicit liquor and protect public health while growing government funds.

1. Diverse technologies, common goal.
Increasing Revenue and Curbing
Illegal Liquor in India
Presented by:
Manoj Kochar
© 2014 ASPA (formerly known as HOMAI) www.homai.org
President
Authentication Solution Providers’ Association
(Formerly known as Hologram Manufacturers
Association of India)
Tax Stamp Forum, Dubai: 16th September 2014

2. Diverse technologies, common goal.
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 Honorary
© 2014 ASPA (formerly known as HOMAI) www.homai.org
members
• Mission : To provide a platform where authentication
technology providers can converge and collaborate to
develop customised cutting edge authentication solutions
for their customers

3. Diverse technologies, common goal.
Indian Tax System
State (Province)
Government
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Central (Federal)
Government
Custom Duties
Income Tax
Manufacturing Tax
(Central Excise)
Liquor Excise
Sales Tax/VAT
Municipal Taxes

4. Diverse technologies, common goal.
Various States in India
© 2014 ASPA (formerly known as HOMAI) www.homai.org

5. Diverse technologies, common goal.
Liquor Tax Stamps currently in use
• The first tax stamp appeared in 1980’s on a thin glassine based
© 2014 ASPA (formerly known as HOMAI) www.homai.org
paper
• 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

6. Diverse technologies, common goal.
Initial Challenges and Redressal
© 2014 ASPA (formerly known as HOMAI) www.homai.org
• 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 Voters
Identity Card, Driving Licence helped
• Positioning – not a panacea but a potent tool to help identification
of illicit liquor
• The industry invested to build up capacities
• Pilot projects conducted for bottlers
• Stress on overt features

7. Diverse technologies, common goal.
Evolution of HEAL
• The first hologram stripe on a Paper based Tax stamp appeared in
© 2014 ASPA (formerly known as HOMAI) www.homai.org
1998
• The first OVD Hologram Excise Adhesive Label (HEAL) appeared in
1999
• Teething Problems
o Implementation issues at the Departmental level
o Hologram affixing, Bottler education
• Gradually all the stakeholders realised the benefits, and then gave
their wholehearted support

8. Diverse technologies, common goal.
Technology currently seen on
© 2014 ASPA (formerly known as HOMAI) www.homai.org
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

9. Diverse technologies, common goal.
Technology - Paper based Labels
• Combination origination techniques
© 2014 ASPA (formerly known as HOMAI) www.homai.org
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

10. Diverse technologies, common goal.
Typical Transaction Cycle for HEAL
• Department invites RFQ; selects vendor
• Vendor sets up a Numbering unit under Excise department
© 2014 ASPA (formerly known as HOMAI) www.homai.org
supervision
• Vendor produces holograms at existing facility and supplies the
HEAL to the Numbering Unit Numbering/Coding under Department
supervision
• 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

11. Diverse technologies, common goal.
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
© 2014 ASPA (formerly known as HOMAI) www.homai.org

12. Diverse technologies, common goal.
Market Coverage
Arunachal
Jammu Pradesh
& Kashmir
Maharashtra Tripura
Telangana
Puducherry
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Himachal
Pradesh
Delhi
Assam
Punjab Meghalaya
Uttrakhand
Uttar
Pradesh
Haryana
Sikkim
Rajasthan Nagaland
Bihar
Jharkhand
Manipur
Madhya
Pradesh
West
Bengal
Gujarat Mizoram
Chhattisgar
h
Orissa
Goa
Karnataka Andhra Pradesh
Kerala Tamil Nadu
State using
HEAL(12)
State using
Paper based
label with
OVD (5)
State using
Filmic label (1)
Potential (11)

13. Diverse technologies, common goal.
Case Study – Tamil Nadu
3,398
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Revenue in mil USD
402 431 439 483 496 389
599
746
936
1,119
1,352
1,583
1,906
2,343
2,848
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14 (BE)
Tamilnadu
HEAL
Introduced
All exchange rates frozen as of March 1998

14. Diverse technologies, common goal.
Case Study – Madhya Pradesh
1,350
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Revenue in mil USD
227 252 229
165 209 255 280 322 363
435
541
693
846
1,014
1,193
1,600
1,400
1,200
1,000
800
600
400
200
0
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14 (BE)
Madhya Pradesh
HEAL
Introduced
All exchange rates frozen as of March 1998

15. Diverse technologies, common goal.
Case Study – Uttar Pradesh
2,735
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Revenue in mil USD
383
499 526 461
600 581 631
725
834
927
1,109
1,331
1,579
1,912
2,298
3,000
2,500
2,000
1,500
1,000
500
0
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14 (BE)
Uttar Pradesh
HEAL
Introduced
All exchange rates frozen as of March 1998

16. Diverse technologies, common goal.
Comparison in Revenue Growth
From 2005 to 2013
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Amount in mil USD
2,500
2,000
1,500
1,000
500
STATES USING HEAL/OVD ON THEIR TAX
STAMPS
STATES NOT USING TAX
STAMPS
2,249
1,941
1,667
913
506 458
0
Tamilnadu Karnataka Uttar Pradesh Madhya Pradesh Bihar West Bengal
All exchange rates frozen as of March 1998

17. Diverse technologies, common goal.
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
© 2014 ASPA (formerly known as HOMAI) www.homai.org
Tax Stamp in place
• Track and Trace based HEAL

18. Diverse technologies, common goal.
Implementation of Track and
Trace Based System
© 2014 ASPA (formerly known as HOMAI) www.homai.org

19. Diverse technologies, common goal.
ASPA Role
© 2014 ASPA (formerly known as HOMAI) www.homai.org
• 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

20. Diverse technologies, common goal.
Press Clippings
© 2014 ASPA (formerly known as HOMAI) www.homai.org

21. Diverse technologies, common goal.
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!!
© 2014 ASPA (formerly known as HOMAI) www.homai.org

22. Diverse technologies, common goal.
Thank You
For more information, please contact
© 2014 ASPA (formerly known as HOMAI) www.homai.org