The good starting point to explain this issue is the exceptionally complicated regulatory architecture under the Constitution for these alcoholic tinctures, which are liquid extracts of herbs dissolved in alcohol. As per Schedule VII of the Constitution, only States can enact legislation in relation to public health and the taxation of alcohol. The exception this rule of taxation is if the alcohol is meant for medicinal purposes, in which case, Entry 84 of List I allowed the Union to decide the rate of taxation.

A recent judgment of the Supreme Court of India, in Bhagwati Medical Hall Versus Central Drugs Standard Control Organization & others, has, once again, turned the impossible challenge faced by State Governments in regulating a significant public health hazard—that posed by alcoholic tinctures marketed in India as homeopathic remedies.

In the pre-Goods and Services Tax (GST) era, alcohol for medicinal preparation was taxed at a tiny 4% under the now repealed Medicinal and Toilet Preparations (Excise Duties) Act 1955. Nevertheless, the Union has prescribed an 18% tax slab for alcohol meant for medicinal purposes, which is still significantly lower that State taxes on alcoholic beverages.

Another aspect is that drugs are on the Concurrent list, which means that both Union and States can enact law but since the Drugs and Cosmetic Act, 1940 is the Union law laying down quality standards for homoeopathic products, States need presidential approval for State-specific amendments.

This complex regulatory architecture has meant that manufactures of these homoeopathic alcoholic tinctures have historically been immune from any form of quality regulation or taxation by States despite having a direct impact on public health which again is the responsibility of States, as per List II of Schedule VII.

Moreover, due to the difference in taxation rates for alcoholic tinctures is sold as homoeopathic remedies and alcoholic beverages, alcoholic tinctures manufactured by the homoeopathic industry are more affordable than alcoholic beverages. These alcoholic tinctures are the perfect substitute for alcoholic beverages especially since many of these tinctures contain a very high volume of alcohol.