HANDBOOK ON POLICIES 2005-06

Karnataka State Beverages Corporation Limited “Seethalakshmi Towers” 78, Mission Road Bangalore 560 027

Karnataka State Beverages Corporation Limited Handbook on Policies 2005-06

INDEX

Sl. No. 1

Subject

Circular No.

Page No.

Liquor Sourcing Policy for 2005-06

083

01 to 38

2

Liquor Sales Policy for 2005-06

084

39 to 48

3

Sourcing policy for rectified spirit and denatured spirit for 2005-06

085

49 to 74

4

Sales policy for rectified spirit and denatured spirit for 2005-06

086

75 to 87

5

Import policy for rectified spirit and denatured spirit for 2005-06

087

88 to 93

6

Policy on import of spirit from abroad (Potable/Non-Potable) for 2005-06

088

94 to 95

7

Export policy for rectified spirit and denatured spirit for 2005-06

089

96 to 97

(ii) (iv) Circular No. certified copies of the Licenses under relevant rules as may be applicable. In case of manufacturers based in the state.083 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No. a certified copy of the License granted by the Excise Commissioner under rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules. Suppliers are requested to take note of the procedure prescribed in this circular which would come into effect from 1. (i) Details of the organisation of the manufacturer to be given in its letter head in the format in Annexure I.01 Manufacturers/Suppliers desirous of supplying liquor to the Corporation for subsequent distribution to buyers shall submit the following documents.083 Liquor sourcing policy for 2005-06 A detailed procedure for sourcing of liquor has been prescribed in various circulars issued by the Corporation from time to time. for the Corporation to initiate action.2005. 1967 or rule 3 of the Karnataka Excise (Brewery) Rules. In case of manufacturers located outside the state. to be given in its letter head as per the format in Annexure III. Letter authorising representatives (not exceeding three) of the manufacturer/supplier for collection of Order for Supplies and other documents. Submission of initial documents June 27. granted by the competent authority of the state where the distillery/brewery of the manufacturer is located.Karnataka State Beverages Corporation Ltd. Circular No. (iii) Details of authorised signatories of the manufacturer/supplier.083 Page 1 of 97 . if any. This circular supercedes all previous procedures. 1967 as the case may be and a copy of the License granted under rule 5 of the Karnataka Excise (Bottling of Liquor) Rules. 1. 2005 1. to be given in its letter head as per the format in Annexure II. authorisation of the manufacturer. 1967.7. who would deal with the Corporation. along with a copy of the certificate of incorporation or partnership deed and registration from the registrar of firms as the case may be. so far as it pertains to sourcing of liquor. permitting the supplier to deal with the products proposed to be supplied to the Corporation. In case of suppliers supplying liquor imported from abroad.

Manufacturers may note that the Corporation shall not be held liable by them in respect of any decision of the Excise Commissioner regarding approval of their labels. duly executed by the authorised signatory of the manufacturer/supplier in a stamp paper of denomination of Rs.01 Labels of brands proposed to be supplied by a manufacturer located in the state have to be approved by the Excise Commissioner under rule 15(3) of the Karnataka Excise (Bottling of Liquor) Rules. then a copy of the agreement between the manufacturer/supplier and the owner of the brand. approval for labels as granted by the competent excise authorities of that state and the authorisation for exporting from that state to Karnataka.Karnataka State Beverages Corporation Ltd.25.per annum per label for liquor other than wine and Rs. 2. 2. Such an approval shall be obtained by the manufacturer and submitted to the Corporation. Circular No. reasons for not submitting the certified accounts of such year may be indicated. Registration of labels 2.03 Manufacturers located outside the state shall apply to the Corporation as per the format in Annexure-V along with a copy of the permission for the manufacture of the brands proposed to be supplied.06 Suppliers of foreign brands shall apply to the Corporation as in the format in Annexure-VI enclosing challans for having paid the necessary fee for label approval.083 Page 2 of 97 . If such accounts pertain to a period other than the recently concluded financial year.083 dated 27-06-05 An agreement as in the format in Annexure-IV.per annum per label for wine) and enclose the challan in original and a copy thereof and provide six copies of each label.02 As per rule 9(B) of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules. 1968 no item manufactured outside the state can be sold in the state without an approval of such brand label by the Excise Commissioner. 1968 no item imported from abroad can be sold in the state without an approval of such brand label by the Excise Commissioner.100/-. the Corporation is required to apply to the Excise Commissioner for approval of brand labels. 2.000/.000/. 2. 1967.50. (v) Circular No. If the manufacturer/supplier is not the owner of the brands proposed to be supplied.05 As per rule 9 (C) (1) of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules. Certified copy of the latest audited accounts and annual report. (vi) (vii) 2. And as per rule 9 (C) (2) of these rules. They shall remit necessary fees for label approval (currently being Rs.04 The Corporation would thereafter forward such applications to the Excise Commissioner for consideration. 2.

They shall do so and submit two copies of the declarations in forms DP and MRP as recorded by the Excise Commissioner.05 below). the Corporation would not act on the DP and MRP forms submitted by the manufacturer.05 below).07 The Corporation would then apply for label approval. the sale price and the Maximum Retail Selling Price taking due note of the provisions of the Karnataka Excise (Excise Duty and Fees) Rules. 2. the Corporation would submit necessary declarations to the Excise Commissioner for recording the sale price and the Maximum Retail Selling Price.03 In respect of brands imported from outside the State. manufacturers may ensure that the description of the item in forms DP and MRP is exactly the same as the label approval accorded by the Excise Commissioner. 1968. Based on the cost sheet.20. Circular No.02 While doing so. They shall submit a cost sheet. the fee for label approval in such cases is Rs. These details shall be made available to the Corporation at least three days prior to the date on which the manufacturer desires to have the first Order for Supplies (OFS) in respect of these brands.Karnataka State Beverages Corporation Ltd.000/.04 Suppliers desirous of supplying liquor imported from abroad shall submit a cost sheet containing details of basic price and duties in the form as in Annexure. containing details of basic price and duties in the form as in Annexure-VII. the sale price and the Maximum Retail Selling Price taking due note of the provisions of the Karnataka Excise (Excise Duty and Fees) Rules. They shall be liable for any consequence arising out of any action initiated by the Corporation based on such cost sheets. Suppliers may note that the Corporation shall not be held liable by them in respect of any decision of the Excise Commissioner regarding approval of their labels. the Corporation is required to declare the price for sale and the Maximum Retail Selling Price of such products.for beer and wine.10.083 Page 3 of 97 .VIII for stocks imported after payment of Customs Duty and as per the form in Annexure IX for stocks imported duty free. 3. Declaration of prices and Landed Cost 3. They shall be liable for any consequence arising out of any action initiated by the Corporation based on such cost sheets. The price shall be indicated in Indian rupees and shall not be contingent upon any fluctuation in foreign exchange rates.05 The term Landed Cost to the Corporation shall mean. Manufacturers may please note that they are required to work out the Landed cost (see 3. 3. In case of any difference.for liquor other than beer and wine and Rs. 1968. 3. Suppliers may please note that they are required to work out the Landed cost (see 3.000/. 1968.01 Manufacturers located within the State are required to declare the price of liquor in Form DP and the Maximum Retail Selling Price in form MRP under Rule 2AE and Rule 2AF respectively of the Karnataka Excise (Excise Duty and Fees) Rules. Circular No.083 dated 27-06-05 Currently. 3. 3.

083 dated 27-06-05 In the case of supplies from the manufacturers within the State the ex-factory declared price of the manufacturer (including the profit margin) plus excise duty and additional excise duty as applicable. 1968.07 Manufacturers located in the state who revise their price shall submit the revised DP and MRP forms as recorded by the Excise Commissioner. except in cases of liquor imported from abroad. necessary particulars shall be given to the Corporation in the prescribed format. Such revision shall become effective after the revised DP and MRP are recorded by the Excise Commissioner in the case of former and from the 1st of the month following the month during which the particulars are received by the Corporation in the case of the latter. Manufacturers may ensure that the Countervailing Duty and Additional Countervailing Duty are calculated on ex-factory manufacturer’s price plus import fee plus the margin charged by the Corporation.06 The Corporation shall charge a margin of 2 per cent on the Landed Cost. 3. Till such time the MRP is re-recorded.11 In case of manufacturers located outside the state. (iii) In the case of liquor brands imported from abroad after payment of customs duty.08 In case of revision in prices by manufacturers located outside the state or suppliers delivering liquor imported from abroad. The Corporation would compute the new prices and make necessary changes in prices. 3. (ii) In the case of supplies imported from outside the state but within India. Circular No.09 In case of any change in the duty structure.083 Page 4 of 97 . plus litre fee and Special fee as applicable. 3. new prices shall become effective from the date of notification issued by the government. where the margin shall be 5 per cent of the Landed Cost. plus litre fee and Special fee as applicable. Till such time they submit the re-recorded MRP. the Basic Price of the importer plus Customs Duty and other fees and levies. no fresh OFS shall be issued. the Basic Price of the importer plus other fees and levies. after re-recording such MRP in accordance with Rule 2-AF(2) of Karnataka Excise (Excise Duties and Fees) Rules.10 Manufacturers in the state shall submit a revised Maximum Retail Selling Price in respect of their products. 3. the all inclusive ex-factory manufacturer’s price (including the profit margin) plus Import Fee plus Countervailing Duty and Additional Countervailing Duty. no fresh OFS shall be issued. (iv) In the case of duty free import of liquor from abroad.Karnataka State Beverages Corporation Ltd. Such manufacturers shall provide necessary particulars in Annexure VII for submitting a revised MRP for recording by the Excise Commissioner. the Corporation would effect necessary changes in prices with effect from the date of notification. The Corporation would implement revised declared prices as approved by the Excise Commissioner and intimated by the manufacturer. 3. 3. (i) Circular No.

3. 3. extend the validity of the OFS and the manufacturer/supplier shall honour the OFS within the extended validity period.13 In all such cases. if any. If a manufacturer/supplier does not honour the quantity indicated in the OFS within the validity period.11 above shall be applicable in case of suppliers delivering liquor imported from abroad. the incremental duty amount would be recovered and remitted to the Government passing on the benefit of price increase to the manufacturer. except in cases where such price increase results in payment of additional duty. To facilitate the process. 4. The Corporation shall issue OFS based on the stock requirement of depots after duly considering the quantity held. 4. 4. However. The Corporation may.14 Any loss/gain due to a price reduction/increase shall be to the account of the manufacturer. communicate to the Corporation.02 Two copies of the OFS will be issued for the exact quantity that the supplier proposes to transport.05 In respect of supplies from outside the State or from outside India. then the order for the remaining quantity shall lapse automatically. 4. the supplier may indicate the requirement of its brands and packs in various depots. remit the import fee.083 Page 5 of 97 . imperative that manufacturers/suppliers indicate their despatch plan for issue of OFS. 4. the Corporation reserves its right to decide the quantity for which OFS can be issued. all pending OFS would be cancelled by the Corporation and manufacturers shall surrender all outstanding OFS and collect revised OFS immediately. Circular No. the details of such scheme and its impact on the maximum retail selling price. as the OFS would be issued at revised rates. Countervailing Circular No. at its discretion. 3. the sales trend and requests of the manufacturer/supplier. It is.01 Supplies to the Corporation shall be based on the Order for supplies (OFS) issued by it.15 Manufacturers/suppliers shall. except that no re-recording of MRP would be necessary in such cases. after the issue of OFS. The OFS shall be signed by one of the authorised signatories of the Corporation whose specimen signatures may be seen in Annexure-X to this circular. In such cases.083 dated 27-06-05 3.03 The OFS would indicate the validity date within which the manufacturer/supplier should complete the delivery.04 Repeated lapsing of OFS without valid reasons may result in reduction of quantity sourced and may also attract other penalties that the Corporation may specify from time to time.12 The procedure in para 3. therefore. the manufacturer/supplier shall. before introducing any sales promotion or discount scheme. Order for supplies 4. Special requests or difficulties faced by manufacturers/suppliers regarding issue of OFS may be addressed to the General Manager (Operations).Karnataka State Beverages Corporation Ltd.

Circular No. The Corporation shall be entitled to recover any short payment of duty and other amounts from them. Manufacturers/suppliers may please take note that they are responsible for remitting the correct quantum of duties/fees and that they are liable for any short payment of duties and other consequences.083 dated 27-06-05 Duty and Additional Countervailing Duty or the Litre fee and Special fee as may be applicable for their respective brands. The Corporation shall be entitled to recover any short payment of duty and other amounts from them. 5. An Order for Supplies shall be issued by the Corporation to the supplier.03 The eligible importer shall declare the brands and the quantity proposed to be imported under this provision.Karnataka State Beverages Corporation Ltd.01 The EXIM policy 2002-07 provides for duty free imports equivalent to 5 per cent of the average foreign exchange earned by exporters (eligible importer). manufacturers shall effect supplies within the time period mentioned in the OFS. 5. Duty free imports 5.01 As indicated above.02 The eligible importer shall be permitted to import only registered labels approved for consumption in Karnataka for the relevant excise year. quantity and pack sizes as indicated in the OFS. The eligible importer shall produce a copy of the eligibility certificate.04 The supplier as declared by the importer shall be responsible to complete customs and other formalities so that the goods can be transported to the state. The procedure detailed below shall be applicable for import of liquor into the state under this provision. should such instances occur. issued by the Director General of Foreign Trade for duty free import of such stocks. 5. The source of import which shall be a supplier who has submitted initial documents to the Corporation and in whose favour the labels have been registered shall also be declared by the eligible importer. The rate of supply of the item shall be as indicated by the supplier in the cost sheet for duty free import.06 The supplier shall thereafter remit state levies as may be applicable. Any delivery that deviates from the OFS shall not be acknowledged by the Corporation and shall not be unloaded at the depot. Suppliers may note that they are responsible for remitting the correct quantum of duties and that they are liable for any short payment of duties and other consequences. 5. should such instances occur. Circular No.083 Page 6 of 97 . 5. 5. Delivery 6. 6.05 The Corporation shall be the indentor of stocks on behalf of the eligible importer. The stocks shall be delivered at the depot specified by the Corporation at the cost and risk of the manufacturer/supplier and shall conform to the brand.

all such orders shall be attached. the Corporation is a Public Sector Undertaking as defined under section 2(31A) of Income Tax Act. Circular No. the manufacturers shall invariably quote in their invoice. Further. (i) The original OFS issued by the Corporation. Copy of the challans for having remitted duties in case of manufacturers located in the State. Such details may be furnished on one of the longer sides of the carton box as per the format in Annexure XIII. the invoice rate shall be as indicated in the OFS. if they so choose indicate the declared price and the duties thereon separately for every item.07 All manufacturers in the state are required to mention the excise adhesive label numbers on all the liquor carton boxes supplied to the Corporation. 6. The excise adhesive label numbers shall be written in permanent marker pen. However. (ii) (iii) (iv) (v) 6. If the supplies made are in satisfaction of more than one order so issued.05 Permit fee and other levies are not a part of the Landed Cost and therefore cannot be claimed in the debit note. Circular No. If a lorry load of liquor is in satisfaction of more than one OFS either partially or fully that many invoices shall be raised by the manufacturer/supplier. if applicable. Hence. TCS shall not be claimed either in the invoice or in the debit note.04 In respect of imported brands (both from outside the state and the country) the invoice rate shall be the all inclusive ex-distillery price of the manufacturer (item A (iii) of Annexure VII or item A (iv) of Annexure VIII or item A (iii) of Annexure. They are required to indicate the Landed Cost of the item as per the OFS placed on them. 1961. They may. Copy of the permits issued by the Excise Department. No other matter shall be printed on this side.Karnataka State Beverages Corporation Ltd. Lorry Receipt.02 An exclusive invoice shall be raised for every OFS issued. 1961 (PAN No. indicating the Declared Price for various items supplied and adding Excise Duty and Additional Excise Duty as a lump sum at the end of the invoice shall be avoided. 6.03 In cases of supplies from manufacturers in the state. AACCK1421A) with all the shares being held by Government of Karnataka and hence is exempt from TCS under section 206C of the Income Tax Act.04. Other state levies paid by them may be claimed as a debit note in the format as in Annexure XI and XII as the case may be and shall be submitted along with the invoice. the reference number and date of the OFS issued by the Corporation and surrender the OFS in original to the receiving depot.IX as the case may be). 6.083 Page 7 of 97 .06 The invoice of the manufacturer/supplier shall be accompanied by the following documents and shall be submitted to the receiving depot. 6. It may be ensured that the per unit rate (invoice rate plus debit note rate) is as indicated in the OFS. and Necessary debit notes as indicated in para 6. At the time of effecting delivery.083 dated 27-06-05 6.

09 In respect of imported liquor (both from within the country and abroad).083 Page 8 of 97 . 7. 6. Circular No. 6. 7. The Corporation may.08 Manufacturers/suppliers may please note that the consignment would not be unloaded in the receiving depot if the requirements indicated in the above paras are not complied with.02 Further.Karnataka State Beverages Corporation Ltd. the quality control exercised by them shall in no way be less rigorous than 7. However. The liquor produced shall be released for sale only after the chemist certifies that the same is fit for human consumption.083 dated 27-06-05 6. Any instance of overloading noticed by the Corporation may result in appropriate action as may be necessary.01 The manufacturer/supplier is expected to ensure that the items delivered to the Corporation are fit for human consumption and adheres to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable.11 Manufacturers shall also ensure that they do not overload the lorries transporting their goods. Circular No. such overloading is a major cause of excessive transit and depot damages. 7. if so required. as per rule 20A of the Karnataka Excise (Distillery and Warehouse) Rules. No labels shall be affixed on the carton box for distinguishing any aspect of the brand. The Corporation expects that manufacturers maintain such certificates carefully and produce them. 6. issue necessary guidelines in case of manufacturers who do not use standard boxes. if it so warrants. 6. Needless to mention.03 Manufacturers/Suppliers of liquor imported from other states shall ensure compliance with rules/stipulations regarding quality as may be specified by authorities of that state. the supplier shall make arrangements to affix excise adhesive labels on the bottles and if necessary.10 Manufacturers shall ensure that the carton boxes used by them conform to the specifications of the Bureau of Indian Standards and that the boxes do not become a cause for excessive transit and/or depot damages. such details shall be printed on the box.02 above. 1967 manufacturers in the state are required to establish a well equipped chemical laboratory within their premises. Manufacturers shall ensure that the consignment is taken care of while waiting for unloading at the depot and the Corporation shall not be liable in this regard. They may also ensure that each brand in their portfolio has a distinct carton box and in no case is a carton box similar to any other box in their portfolio. which shall be followed by them. offer the boxes for inspection at the depot. Adherence to quality 7.12 The consignment shall reach the depot during working hours.

sale in respect of that particular batch of the item (if in stock) would be suspended immediately. (like broken bottles. damage due to weak carton boxes. Circular No. This amount shall be recovered against the payments due to the manufacturer. Stocks held for sale 9.01 The Corporation would take necessary care of the stocks held for sale as is reasonably possible and expected of it. losses experienced if the day’s production of beer is received in the depot. to ensure that quality standards are adhered to.Karnataka State Beverages Corporation Ltd. If any of these products do not conform to specifications.02 Damages to the stock held for sale. If an item does not adhere to the quality standards expected of it.06 In such a case. All risks during transit of liquor. etc. then such products would be black listed and the Corporation would stop transacting in the same at the risk and cost of the manufacturer/supplier.083 dated 27-06-05 7. in reputed laboratories and produce the test results.per carton box per month or part thereof.083 Page 9 of 97 . Stocks that are more than ninety days old would attract a penalty of Rs. the manufacturer/supplier shall test all other brands also and produce test results to the Corporation.03 Manufacturers/suppliers may ensure that stocks held for sale are sold expeditiously. affix excise adhesive labels wherever necessary and stack the boxes in the depot.05 The Corporation may periodically request manufacturers/suppliers to test samples of such items as it may decide.04 Suppliers of liquor imported from abroad shall ensure that the quality standards and procedures as prescribed by the Department of Customs and Central Excise for imports into India are complied with 7. short receipts. 9. quantity filled being less than the declared quantity. Manufacturers/suppliers may. 7. The manufacturer/supplier would also be advised to improve the quality to conform to specifications. as a result of any negligence of the manufacturer/supplier or the transporter (typical of these are bottles having hairline cracks resulting in steady evaporation of the contents. Transit risk and losses 8.) would be to the account of the manufacturer/supplier. 9. Any decision of the Corporation as regards the nature and quantum of such losses shall be final and binding.60/. Circular No. if they so desire.) from the premises of the supplier till the stocks are unloaded and stacked in the depot shall be borne by the manufacturer/supplier alone and the Corporation shall not be responsible for the same. 9. 8. The penalty would be levied on the number of carton boxes more than 90 days old as on the last day of the previous month. The manufacturer/supplier shall unload the stock.01 It is the responsibility of the manufacturer/supplier to deliver stocks at the depots of the Corporation. etc. depute their representatives to verify such bottles and satisfy themselves.

Circular No.083 Page 10 of 97 . 1967. stacking. Losses to the stock due to the transfer shall be borne by them. Any expenditure incurred by the Corporation towards this shall be recovered from the manufacturer/supplier. transportation. Such amounts shall be reckoned by the Corporation while making payment to the brewery for the goods sold. except to the extent mentioned in clauses 13 and 14 below. any stock of beer lying unsold for a period of over six months from the date of delivery or stocks declared unfit for human consumption at the depot shall be drained out by the Corporation.02 The depot where the GRN is delivered in original by the buyer would pass a credit note crediting the buyer and debiting the brewery. 12. In either case. 11. Circular No.Karnataka State Beverages Corporation Ltd.05 However. indicating the name and address of the buyer and the value of bottles accepted by the brewery. such transfers would facilitate disposal of stocks.04 If the manufacturer/supplier does not take necessary action to liquidate such stocks expeditiously. In accordance with Rule 5 of the Karnataka Excise (Intoxicants Destruction) Rules. unloading. Inter depot transfers 10. Amounts indicated in any document.01 Manufacturers/suppliers shall have the liberty to effect inter depot transfer of stocks for quick and easy disposal. etc. Payment for stocks sold 12. If no confirmation is received within two months. if in their opinion. 10.01 Buyers may return empty bottles directly to the brewery. no compensation shall be payable in respect of such stock. manufacturers/suppliers shall bear all expenses towards inter depot transfers like permit fee. such amounts shall be immediately debited to the account of the manufacturer.03 The Corporation would periodically inform details of such credits given to buyers. The brewery may accept the bottles so returned and prepare a Goods Receipt Note (GRN). Stocks held for sale shall not be eligible for any payment. Bottle returns 11. The manufacturer/supplier shall not have any further claim against the Corporation in respect of such stocks. with a request to confirm the same. loading. the Corporation expends any amount towards the transfer.083 dated 27-06-05 9. other than the GRN. shall not be reckoned by the Corporation. like permit fees. 9.01 The Corporation shall pay the manufacturer/supplier only for the stocks sold. 11. it would be presumed that the credits given are in order. initiate inter depot transfers. The Corporation may also. the Corporation may dispose off the stock in any manner as may be appropriate and the difference between the Landed Cost and the amount realised shall be borne by the manufacturer/supplier. if necessary.02 If for any reason. 11. 10.

would be made available at the depot level.083 Page 11 of 97 . etc. To facilitate such transfer.02 The amount payable to a manufacturer/supplier for the sales provisionally recorded between Thursday and Wednesday next shall be computed and paid on Saturday (Monday in case Saturday is a holiday). etc..01 Every depot of the Corporation would provide details of sales effected during the day to representatives of manufacturers/suppliers. the Corporation would consider such requests on the following terms: (a) The distillery may open a separate bank account appropriately titled (for instance M/s.05 In case the manufacturer/supplier desires a separate payment in respect of some brands. 12. The period for which sales would be reckoned for payment would be suitably modified. Such information would be provided by placing a copy of the sales invoices for the day for perusal. Information to suppliers 13. bottle returns. For instance. 12. if Friday happens to be a public holiday/bank holiday. The Corporation would provide a statement of provisional sales recorded to facilitate reconciliation.Karnataka State Beverages Corporation Ltd. Such information. if needed. Any missing data due to delays/failures in electronic transfer of data shall be reckoned in the succeeding week and adjusted. 12.04 Payment by the Corporation would only be through a transfer directly to the bank account of the manufacturer/supplier. No other information like sales trend. Circular No. sales will be reckoned from Wednesday to next Wednesday. shall be recovered out of the amounts payable. 13. (b) (c) (d) 12. Operating this account may be internally decided between the distillery and the brand owner.083 dated 27-06-05 12. may be sought from the Head Office directly. interest.03 Any amounts to be recovered from the manufacturer/supplier due to penalty charges. The arrangement so made can be revoked only with a seven-day notice to the Corporation. sales between Thursday and Tuesday next would be reckoned and for the subsequent week. No payment by any other mode is allowed.06 The Corporation would not be a party to any bill discounting or factoring arrangements that the manufacturer/supplier may enter into with his bank. manufacturers/suppliers shall open an account with any one of the bankers to the Corporation or maintain an account with a bank having RTGS facility. depending on intervening holidays. market share. XYZ Distilleries – Brand Owner Account) and communicate the account number to the Corporation. Circular No. The distillery may specify the brands for which payment due is to be directly credited to this account.

Karnataka State Beverages Corporation Ltd.

Circular No.083 dated 27-06-05

13.02 All critical details like deliveries affected, sales, damages, etc., would be made available through the website of the Corporation (www.ksbcl.com). All manufacturers are required to verify the data and point out discrepancies, if any. If requested by the manufacturer/supplier, the Corporation would provide an extract of all transactions for facilitating reconciliation. Manufacturers/suppliers may verify the statement and point out instances of differences, if any, within the next two months. The Corporation would, after confirmation, initiate corrective action. However, no such difference shall be entertained by the Corporation after two months of the close of the financial year. 14. Advance towards duties paid for stocks delivered

14.01 The Corporation would, on an ongoing basis, advance the Excise Duty and Additional Excise Duty remitted by manufacturers in respect of stocks delivered. In addition to the advance towards duties paid for stocks delivered, manufacturers/suppliers may, if they so desire, seek a one time reimbursement of duties paid in respect of stocks held by the Corporation as on a particular date. The scale of the advance would be as per Annexure XIV. 14.02 Manufacturers/suppliers shall specifically express their willingness ten days prior to the date from which they desire the advance and conclude an agreement as given in Annexure XV before the advance can be paid. Any manufacturer who has opted for obtaining the advance may opt out after giving ten days notice. In such a case, the outstanding advance would be recovered in such installments as may be decided by the Corporation. 14.03 Stocks that have an inventory turnover ratio (the ratio computed as the total sales for the last three months divided by the average stock held during that period, called eligible stock) of 2.5 or above shall alone be eligible for the advance. 14.04 The Corporation shall have the first charge on the eligible stocks for which an advance has been paid. The manufacturer/supplier shall be obliged to inform this position to the bank with which it has banking arrangements and inform the Corporation accordingly. 14.05 Manufacturers/suppliers may ensure that the value of eligible stocks held by the Corporation is 1.50 times the advance outstanding against them. In the event the value of eligible stock falls below 1.50 times the advance outstanding, proportionate recovery would be made out of the amounts due to the manufacturer/supplier on the next payment day. 14.06 The advance shall be paid every week along with the payment for stocks disposed off by the Corporation. The advance shall carry interest at 12 per cent per annum. The advance in respect of the stock sold and the interest payable on the amount outstanding shall be computed every week and adjusted against the payment to be received by the manufacturer/ supplier.

Circular No.083

Page 12 of 97

Karnataka State Beverages Corporation Ltd. 15.

Circular No.083 dated 27-06-05

Advance payment of duties for supply of stocks

15.01 Manufacturers/suppliers, who have adequate stocks and/or have sufficient raw material and work in progress and other facilities to supply stock against the OFS issued by the Corporation within three days of drawing the advance, are eligible to avail an advance for payment of Excise duty and Additional Excise duty as per the scale in Annexure XIV. 15.02 Only eligible stock (as defined in para 13.03) shall qualify for the advance. Manufacturers intending to avail an advance as aforesaid shall make a written request to the Corporation and conclude an agreement as in Annexure XV before their request is considered by the Corporation. 15.03 They shall indicate the amount of advance that they seek, giving details of the brands, sizes and quantities that they intend to supply against the advance requested. The Corporation shall scrutinise such applications and may make inquires and shall call for a confirmation from the Distillery Officer regarding availability of stocks for delivery and/or such other evidence as may be necessary to ascertain the stock position and the capability of the manufacturer to supply against OFS issued and arrive at the actual amount of advance required for payment of ED and AED by the manufacturer. 15.04 The Corporation reserves the right to reject an application completely or partially and make such changes in quantities and brands as it deems fit. The Corporation may, in order to safeguard its interest, attach such additional conditions as may be necessary. Thereafter the Corporation shall provide a demand draft in favour of the Excise Commissioner and the distillery officer of the concerned manufacturer shall acknowledge the same. 15.05 The Corporation shall have the first charge on the eligible stocks for which an advance has been paid. The manufacturer/supplier shall be obliged to inform this position to the bank with which it has banking arrangements and inform the Corporation accordingly. 15.06 Manufacturers/suppliers shall supply the ordered quantity, against which the advance has been availed as above, within three days from the date of payment of duty. The Corporation may at its sole discretion, extend the time for supply of stock by the manufacturer, but in no case shall it extend beyond seven days from the date of payment of duty. 15.07 The Corporation is at liberty to withdraw the facility, if a manufacturer/supplier persistently defaults or violates the conditions of sanction of the advance. 15.08 The advance shall be at a premium of 2 per cent over the normal interest charged by the Corporation as per para 14.06 above. The advance in respect of the stock sold and the interest payable on the amount outstanding shall be computed every week and adjusted against the payment to be received by the manufacturer/supplier.

Circular No.083

Page 13 of 97

Karnataka State Beverages Corporation Ltd.

Circular No.083 dated 27-06-05

16.

Jurisdiction

15.01 All transactions of the Corporation with the Manufacturer/Supplier shall be subject to the exclusive jurisdiction of Bangalore. 17. Review of the policy

16.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all buyers.

(R. Ramaseshan) Managing Director To i) ii) iii) iv) v) vi) vii) viii) All Manufacturers & Suppliers All Primary & Composite Distilleries ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File

Circular No.083

Page 14 of 97

Circular No.083 Page 15 of 97 .Karnataka State Beverages Corporation Ltd.083 dated 27-06-05 Annexure I Details of the organisation of the manufacturer/supplier (To be given in the letter head of the organisation) Name of the organisation: Type of the organisation: Documents enclosed Company/Partnership/Sole Proprietorship Certificate of incorporation/Partnership deed and registration from the registrar of firms Particulars of the Chief Name Address Telephone Fax Executive/Managing number number Partner/Owner Particulars of the other Name Address Telephone Fax Directors/ Partners number number (1) (2) (3) (4) (5) Address for correspondence E mail id Particulars of the bank where payments are to be credited a) Name of the bank b) Branch c) Account number Place: Date: Sd/Chief Executive/Managing Partner/Owner (Name) Circular No.

Circular No.083 dated 27-06-05 Annexure II Details of authorised signatories to deal with the Corporation on behalf of the manufacturer/supplier (To be given in the letter head of the organisation) Name of the signatory Designation Address Telephone number Mobile number E mail id Specimen signature (1) (2) (1) (2) Place: Date: Sd/Chief Executive/Managing Partner/Owner (Name) Circular No.Karnataka State Beverages Corporation Ltd.083 Page 16 of 97 .

Karnataka State Beverages Corporation Ltd.083 dated 27-06-05 Annexure III Authorisation letter for collecting OFS/other documents from the Corporation (to be issued in the letter head of the manufacturer/supplier) (Paste attested photograph of the person here) We hereby authorise Sri. Place: Date: Sd/Authorised signatory (Name) Signature of Sri. (name of the person) Attested Sd/Authorised signatory (Name) Circular No.. Circular No. …………. ……….083 Page 17 of 97 . (name of the person) whose signature is attested below to collect OFS/other documents on our behalf from the Corporation.

assigns.. represented by Shri……………………………………………….083 dated 27-06-05 Annexure IV Agreement to be executed by a manufacturer/supplier desirous of supplying liquor to the Corporation (To be executed in stamp paper of denomination Rs... Bangalore 560027 represented by its General Manager (Operations) Shri James L. Circular No. 1968 and/or under Rule 5 of the Karnataka Excise (Bottling of Liquor) Rules.. registered under the Companies Act. 1968. 1967 and/or under Rule 2(m) of the Karnataka Excise (Brewery) Rules. successors-in-interest.. 1967. unless repugnant to the context.. of the ONE PART AND M/s…………………………………………………………………………………………..78. unless repugnant to the context. shall mean and include its executors.. shall mean and include its executors. is a Government Company within the meaning of Section 617 of the said Act. administrators. (hereinafter called the `Manufacturer/Supplier’) which term. administrators. of the OTHER PART WHEREAS the Corporation. Circular No. 1992. WHEREAS the Corporation is a licensee under Rule 3(11) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules.. day of . No. 100/-) AGREEMENT This Agreement made at Bangalore on ………….Karnataka State Beverages Corporation Ltd.. Mission Road.Ficcker.083 Page 18 of 97 .. OR The Manufacturer/Supplier is a licensee under the relevant Act and Rules of the exporting State.... OR The Manufacturer/Supplier is a licensee under the Foreign Trade (Development & Regulation) Act. (hereinafter called the ‘Corporation’) which term. Two Thousand Five ( / /2005) between the Karnataka State Beverages Corporation Limited having its registered office at “Seethalakshmi Towers”. 1967 and/or under Rule 2(4) of the Karnataka Excise (Manufacture of Wine from Grapes) Rules. successors-in-interest. WHEREAS the Manufacturer/Supplier is a licensee under Rule 2(d) of the Karnataka Excise (Distillery and Warehouse) Rules... etc.. 1956.. assigns. etc.

1 Quantity for Distribution The quantity of Liquor to be procured and distributed shall be determined by the Corporation from time to time.3 2.083 dated 27-06-05 WHEREAS under the Karnataka Excise Act 1965 and the rules made there under. Non-delivery and/or repeated delays in adhering to the delivery schedule may entail recall of the pending Order for Supplies. shall not be carried forward beyond the validity period of the Order for Supplies. The Manufacturer/Supplier shall deliver the Liquor in good condition within such time and at such depots as specified by the Corporation in its Order for Supplies. affix excise adhesive labels and stack the Liquor at the depots of the Corporation at its cost and risk. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS: 1. Short supplies. beer or liquor (all of which.1 2.2 2. keeping in view the demand for Liquor supplied by the Manufacturer/Supplier. The Manufacturer/Supplier shall ensure that the Liquor is transported in an exclusive vehicle and that other goods are not transported in it. transport. unload. Delivery shall be in line with the Order for Supplies placed by the Corporation and shall be completed within the period specified by the Corporation.2 2. WHEREAS the parties herein have entered into this Agreement for the distribution of Liquor on the following terms and conditions.083 Page 19 of 97 . 1. The Corporation is not liable for any transit risk and other perils. In its own interest. 1. the Manufacturer/ Supplier may arrange for an insurance coverage for all the risks including transit risk. Circular No. it shall bottle. In case the Manufacturer/ Supplier is located outside the state or supplies Liquor imported from abroad. Beer and Liquor are hereinafter collectively and severally referred to as ‘Liquor’) only to the Corporation. the Manufacturer/Supplier shall sell wine.. Wine. if any. suspension of distribution and may attract other penalties as may be imposed by the Corporation. unload and stack the Liquor at the depots of the Corporation at its cost and risk. load. transport. i.5 Circular No. it shall bottle. load.4 2. seal.e.Karnataka State Beverages Corporation Ltd. 2. seal. affix excise adhesive labels. pack. Delivery In case the Manufacturer/Supplier is located within the state. The Manufacturer/Supplier shall not claim the right for distribution of Liquor through the Corporation.

2 3. workers. workmen. stacking. if the Manufacturer/Supplier or any of his representatives. In case the Manufacturer/Supplier is located in another state. at his cost and risk. freight. 1967 and shall make available to the Corporation the certificates issued by the chemist under rule 20A (2) of the said rules. without prejudice to its legal rights. 2. Circular No. 4. which offence is punishable under law. etc. Quality The Manufacturer/Supplier shall ensure that the items delivered to the Corporation are fit for human consumption and adheres to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable. agents. if any. (a) (b) indulge in any activity which is directly or indirectly prejudicial to the interest of the Corporation.4 3. withdraw stocks that do not conform to the expected quality.1 3. unloading. voucher or delivery challan or commit any offence in connection with the manufacture and supply of Liquor. etc.Karnataka State Beverages Corporation Ltd. employees.083 dated 27-06-05 The Manufacturer/Supplier may transfer Liquor from one depot to another depot of the Corporation to enable quick disposal and shall bear all costs towards such transfer including permit fee.2 All losses incurred by the Corporation on account of the Manufacturer/Supplier. fabrication of any document. committing the above said prohibited acts.083 Page 20 of 97 . his agents. falsification. etc. In case the Manufacturer/Supplier supplies Liquor imported from abroad. Any damages that may arise on account of such transfer shall be borne by the Manufacturer/Supplier. it shall conform to the stipulations of rule 20A of the Karnataka Excise (Distillery and Warehouse) Rules.. or indulge in forgery. employees.1 4. loading. In case the Manufacturer/Supplier is located within the state. the quality and testing standards shall in no way be inferior to 3. 3. 3. it shall ensure that the quality and testing standards as specified by the authorities of that state are adhered to. it shall ensure that the quality standards and procedures as prescribed by the Department of Customs and Central Excise for imports into India are complied with.2 above.3 3.5 4. However. have the right to forthwith terminate any or all Order for Supplies placed on the Manufacturer/Supplier and forfeit deposits. The Manufacturer/Supplier shall. shall be recovered from the Manufacturer/Supplier. bill. Cancellation of Order for Supplies The Corporation shall.6 Circular No.

The Manufacturer/Supplier shall communicate to the Corporation any sales promotion scheme/activity including the change in the maximum retail price of the goods.2 5.2 below. pursuant to Section 4 of Sale of Goods Act.3 6. 1930. except in cases where such price increase results in payment of additional duty. either in full or in part. The Corporation shall be entitled to deduct such advance. Circular No.3 7. etc. Stocks held for sale The Manufacturer/Supplier. 5. at least two weeks prior to its introduction to the market. 6. 5. determine the interest payable on the amount so advanced. validity period. except to the extent in 6. The Corporation may advance. for the purpose of transfer of property in the liquor being supplied by the Manufacturer/Supplier and distributed by the Corporation. Landed Cost The Manufacturer/Supplier shall deliver the Liquor at the rate as specified by the Corporation in the Order for Supplies.2 6. and is subject to any periodicity that may be specified by the Corporation.083 dated 27-06-05 4. from time to time.083 Page 21 of 97 . The Corporation would. and the Manufacturer/Supplier shall pay the same. No other levy or fee shall be included.. Any loss/gain due to a price reduction/increase shall be to the account of the Manufacturer/Supplier.Karnataka State Beverages Corporation Ltd. the Corporation shall have the right to cancel the Order for Supplies placed on the Manufacturer/Supplier.1 6.1 Circular No. In such cases. the interest due or other dues from any amounts due to the Manufacturer/Supplier. acknowledges that supply of liquor to the Corporation against Order for Supplies shall be construed as an agreement to sell under sub-section 3 thereof and that sale shall be concluded only upon such liquor being sold and delivered to buyers by the Corporation which shall be treated as fulfillment of the condition attached therewith under sub-section 4 thereof. the duties paid or to be paid by the Manufacturer/Supplier to the Government. the incremental duty amount would be recovered.1 5. Payment Payment for the Liquor delivered shall be made only after the disposal of Liquor. 7.3 If the Manufacturer/Supplier indulges in any unfair trade practice. No payment shall be made for the stocks held for sale.

10.2 Circular No. loading.1 Circular No.1 10.5 8.2 8. Inspection and Supervision The Manufacturer/Supplier shall offer all facilities to the Corporation for supervising and verifying various activities like manufacturing.per carton box per month or part thereof. taxes and levies or such other contingent liability that may prevail upon the stocks supplied by the Manufacturer/Supplier and held for sale/distribution by the Corporation. Notwithstanding anything contained in the above.3 9. It shall be entitled to monitor the movement of raw materials into and finished goods from the premises of the Manufacturer/Supplier. 8.083 Page 22 of 97 . 7. any stock of beer lying unsold in the depots of the Corporation for a period exceeding six months from the date of delivery at the depot will be drained at the risk and cost of the Manufacturer/Supplier. the Party being affected by such event shall.1 8. bottling. the Corporation may dispose of Liquor lying unsold for over 120 days and the difference between the price of delivery of Liquor and the amount so realised shall be borne by the Manufacturer/Supplier. till liquidation of the same.3 7. measuring. It shall be open to the Corporation to post its officials under/or of the Government and/or any technical and security personnel as it may deem it necessary from time to time.60/.Karnataka State Beverages Corporation Ltd.1 above. the Corporation shall have unhindered access to all manufacturing and appurtenant facilities and records of the Manufacturer/Supplier for verification and inspection. Compliance with Laws The Manufacturer/Supplier shall comply with the requirements of all laws. unloading. Without prejudice to 7. If the stocks held for sale is not disposed off within ninety days. Force Majeure Upon the occurrence of any event of force majeure. including timely remittance of tax dues and filing of returns. etc. sealing. without delay. shall be responsible for liquidation of liquor stock supplied to the Corporation and shall further continue to be liable for all costs.083 dated 27-06-05 The Manufacturer/Supplier. which are applicable for him. notify the other Party in writing.4 7. 9. No payment shall be made in respect of such stock.3 above. transporting. 7. More particularly. without prejudice to the fulfillment of the condition as mentioned in 7. Such penalty shall be recovered by the Corporation out of any payment due to the Manufacturer/Supplier. the Corporation would levy a penalty of Rs.

be exempted during the period of such happening from the liabilities that would otherwise result from its failure. The venue for arbitration shall be Bangalore. Any claims for infringement of patent. 12.2 (iii) Circular No.1. Arbitration Any dispute. The occurrence of the event of Force majeure will not relieve either party from performing its obligations at such times and to the extent as may be possible after the intervention of the event of Force majeure. 11. and consequences. 12.1 The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act. natural disaster.083 dated 27-06-05 10. The arbitral award shall be conclusive. losses or claims (including claims of additional duty raised by the Government of Karnataka) more specifically. fire. Indian Law shall apply. the Party so failing shall. 12. relating to Liquor delivered.1 Indemnity The Manufacturer/Supplier shall keep the Corporation harmless and indemnified in all matters arising from supply of the Liquor to the Corporation and its subsequent disposal. retailer or consumer shall be settled by the Manufacturer/Supplier at his cost. or Any retired Judge of the Hon’ble High Court of Karnataka. Circular No. to that extent. such as war. which may arise between the Parties herein shall be submitted to arbitration. Non-conformation to the provisions of various laws in force. strike. trademarks etc. Any third party claims arising from any wholesaler. 1996 as amended or substituted from time to time.083 Page 23 of 97 ..2 In the event of any failure in performance due to any force majeure condition. Without prejudice to the generality of the circumstances contained in 12. The Manufacturer/Supplier has agreed with the Corporation to provide for the nomination of a sole arbitrator by the Corporation only from amongst the following: (a) (b) Any retired Judge of the Hon’ble Supreme Court of India . 11. the non-remittance and short remittance towards the duties statutorily payable. the Manufacturer/Supplier shall specifically indemnify the Corporation and keep it harmless with respect to (i) (ii) Non-compliance with the standards specified by the Corporation. or any other cause whatsoever beyond the control of the Party being affected.Karnataka State Beverages Corporation Ltd. final and binding on both the Parties herein.

Ficcker General Manager (Operations) Witnesses: 1. 15.1 Jurisdiction Both the parties are amenable to the exclusive jurisdiction of the Bangalore City Civil Court only. month and year aforementioned in the presence of the following attesting witnesses for Karnataka State Beverages Corporation Limited For Manufacturer/Supplier James L.083 dated 27-06-05 Any breach of the agreement entered into by the Manufacturer/Supplier with any brand owner for the purpose of bottling. the Manufacturer/Supplier is liable to compensate the Corporation for any loss suffered by it due to any act of commission or omission by the Manufacturer/Supplier.1 15. 13.1 IN WITNESS WHEREOF.Karnataka State Beverages Corporation Ltd. 13. Damages Notwithstanding any clause hereinabove. Circular No. Interpretation In the event of any difficulty in interpretation or applicability of any provision. manufacturing or otherwise. (iv) Circular No. The terms of the Sourcing Policy shall be read as part of this agreement and the terms thereof shall be binding. 14.083 Page 24 of 97 . 14. the clauses contained in the Sourcing Policy of the Corporation shall prevail. the Corporation and Manufacturer/Supplier have set and subscribed their signatures and seals on the day. irrespective of where the cause of action or a part of it arises. 2.

. . Karnataka State Beverages Corporation Limited. . Sir. No Brand Size Pack We request you to recommend the above brands for approval of brand labels to the Excise Commissioner. 1. . . Bangalore 560 027.083 Page 25 of 97 . 4. . Sd/Authorised signatory (Name) Circular No. Sl. Authorisation for exporting from …………. for . Seethalakshmi Towers. . . 3. Circular No. Thanking you. Six copies of each label. . We understand that the Corporation is not liable in respect of any decision of the Excise Commissioner regarding approval of these labels. (state) to Karnataka.Karnataka State Beverages Corporation Ltd. Challan in original with a copy for having remitted the necessary fee. . . We desire to supply the following brands of liquor/beer manufactured outside Karnataka for distribution in Karnataka for the excise year 2005-06. . . Copies of the permission for the manufacture of the brands proposed. Yours faithfully. 5. Approval for labels as granted by the competent excise authorities of ………. . Mission road. . 2. .083 dated 27-06-05 Annexure V Application from manufacturers located outside the state desirous of supplying liquor to the Corporation (To be given in the letter head of the organisation) To The Managing Director. . (state). . . . The following are enclosed. . 78.

083 Page 26 of 97 Challan in original with a copy for having remitted the necessary fee. 2. Mission road. for . We confirm that we are authorised to import these brands. We desire to supply the following brands of liquor/beer/wine imported from abroad for distribution in Karnataka for the excise year 2005-06. 3. .Karnataka State Beverages Corporation Ltd. Sir. . The following are enclosed. . Yours faithfully. Seethalakshmi Towers. . . A copy of the authorisation given by the manufacturer of the brand permitting us to deal with the brands above. .083 dated 27-06-05 Annexure VI Application from suppliers desirous of supplying foreign liquor to the Corporation (To be given in the letter head of the organisation) To The Managing Director. . . Six copies of each label. . . No Brand Size Pack On our behalf. 78. Karnataka State Beverages Corporation Limited. . . . . Sd/Authorised signatory (Name) Circular No. Bangalore 560 027. We understand that the Corporation is not liable in respect of any decision of the Excise Commissioner regarding approval of these labels. Thanking you. . 1. Sl. . . . please apply to the Excise Commissioner for approval of brand labels. . Circular No.

Karnataka State Beverages Corporation Ltd. Cost build up for KSBCL selling price Number of bottles per case (i) Ex distillery price of the manufacturer (ii) Other fees/levies/cost Bottling fee Export fee Central Sales tax Others (insurance etc. Circular No.) (iii) All inclusive ex distillery price of the manufacturer [(i) + (ii)] (iv) Import fee as applicable (v) KSBCL margin {at 2per cent of [(iii)+(iv)+(vii)+(viii)]} (vi) Declared Price as per Rule 2AE [(iii) +(iv)+(v)] (vii) Countervailing duty at applicable rates (viii) Additional countervailing duty at applicable rates (ix) Landed cost to KSBCL [(vi)+(vii)+(viii)-(v)] (x) Selling price of KSBCL [(ix)+(v)] B. Cost build up for Maximum Retail Selling Price (i) KSBCL selling price per bottle (ii) Wholesale margin at 5per cent of (i) (iii) Landed cost for retail seller [(i) + (ii)] (iv) Retail margin at 20per cent of (iii) (v) Recorded maximum retail selling price [(iii) + (iv)] Size of the pack (in ml) 180 375 750 Place: Date: Sd/Authorised signatory (Name) Circular No.083 dated 27-06-05 Annexure VII Cost sheet of Liquor brands imported from outside the state (To be given in the letter head of the supplier) Name of the brand Particulars A.083 Page 27 of 97 .

Circular No.083 dated 27-06-05 Annexure VIII Cost sheet of Liquor brands imported from outside the country after payment of custom duty (To be given in the letter head of the supplier) Name of the brand Particulars Number of bottles per case A.) (iv) All inclusive price [(i) + (ii) + (iii)] (v) Litre fee as applicable (vi) Special fee as applicable (vii) Total duties paid [(v) + (vi)] (viii) Landed Cost of KSBCL [(iv) + (vii)] (ix) KSBCL margin at 5per cent of (viii) (x) Selling price of KSBCL [(viii + (ix)] B. Cost build up for KSBCL selling price (i) Basic price (ii) Customs duty (iii) Other fees/levies/cost Central Sales tax Others (insurance etc. Cost build up for Maximum Retail Selling Price (i) KSBCL selling price per bottle (ii) Wholesale margin at 5per cent of (i) (iii) Landed cost for retail seller [(i) + (ii)] (iv) Retail margin at 20per cent of (iii) (v) Recorded maximum retail selling price [(iii) + (iv] Size of the pack (in ml) Place: Date: Sd/Authorised signatory (Name) Circular No.083 Page 28 of 97 .Karnataka State Beverages Corporation Ltd.

Circular No.) (iii) All inclusive price [(i) + (ii)] (iv) Litre fee as applicable (v) Special fee as applicable (vi) Total duties paid [(iv) + (v)] (vii) Landed Cost of KSBCL [(iii) + (vi)] (viii) KSBCL margin at 5per cent of (vii) (ix) Selling price of KSBCL [(vii + (viii)] B.083 dated 27-06-05 Annexure IX Cost sheet of Liquor brand imported duty free from outside the country (To be given in the letter head of the supplier) Name of the brand Particulars Number of bottles per case A. Cost build up for Maximum Retail Selling Price (i) KSBCL selling price per bottle (ii) Wholesale margin at 5per cent of (i) (iii) Landed cost for retail seller [(i) + (ii)] (iv) Retail margin at 20per cent of (iii) (v) Recorded maximum retail selling price [(iii) + (iv] Size of the pack (in ml) Place: Date: Sd/Authorised signatory (Name) Circular No.083 Page 29 of 97 . Cost build up for KSBCL selling price (i) Basic price (ii) Other fees/levies/cost Central Sales tax Others (insurance etc.Karnataka State Beverages Corporation Ltd.

Name of the Officer to sign OFS in respect of supplies from any Designation 1) Specimen Signature James L Ficcker General Manager (Operations .083 dated 27-06-05 Annexure X Specimen signatures of the officers authorised to sign and issue Order for Supplies 1.North) 2) I Sugunamurthy Assistant General Manager (Liquor Sales) 1) 2) Contd…… Circular No.Karnataka State Beverages Corporation Ltd.South) 2) 1) H C Ramesh Chand General Manager (Operations . Officers authorised manufacturer/supplier. Circular No.083 Page 30 of 97 .

Kalburgi Distilleries Ltd. M/s. Srinivasan Designation and authorisation accorded Depot Manager. Murali 2) 1) P. M/s.083 dated 27-06-05 Annexure X Specimen signatures of the officers authorised to sign and issue Order for Supplies 2.Samsons Distilleries in respect of supplies from M/s. Ugar Sugar Works in respect of supplies from M/s.083 Page 31 of 97 . KSBCL Depot. KSBCL 1) Depot. KSBCL 1) Depot.Ugar 2) Sugar Works Depot Manager. 2) Samsons Distilleries Depot Manager.Pampasar Distillery Ltd. KSBCL Depot. Basavaraju V. Name of the Officer S. 1) Specimen Signature C. Prabhakar 2) Circular No. Circular No. Hubli in respect of supplies from M/s.Karnataka State Beverages Corporation Ltd. Depot Manager.Pampasar Distillery Ltd in respect of supplies from M/s. Officers authorised to sign OFS in respect of supplies from specific manufacturers.

2. We have debited your account towards duties paid to the Government of Karnataka.) Amount (in words) Rs. of carton boxes Rate per CB Amount (Rs.no. of carton boxes Rate per CB Amount (Rs. 2. (Name of the Depot) Sir.) 1.083 dated 27-06-05 Annexure XI Form of debit note for imports from outside the state (to be given in the letter head of the supplier) To M/s. for XYZ Distillery/Supplier Authorised Signatory (Name) Circular No. Sub total 6) Additional Excise Duty paid Sl. of carton boxes Rate per CB Amount (Rs.) (Rs.083 Page 32 of 97 . Circular No. 3. Sub total 5) Excise Duty paid Sl. relating to supplies made to you as per the details given below. 3. ……………………………………………………………………. Details 1) OFS No & Date 2) Invoice No & Date 3) Invoice Value (excluding Karnataka State levies) 4) Import Fee paid Sl. No.no. 2.) 1.Karnataka State Beverages Corporation Ltd.) (Rs.) (Rs. No. No. Sub total Total (4+5+6) Debit Note No: Date : Amount (Rs.) 1. 3. Karnataka State Beverages Corporation Limited.no.

(Name of the Depot) Debit Note No: Date : Sir. 2. Sub total 5) Special fee paid Sl. No.Karnataka State Beverages Corporation Ltd. of carton boxes Rate per CB Amount (Rs. We have debited your account towards duties paid to the Government of Karnataka.no.) Amount (Rs. Karnataka State Beverages Corporation Limited. ……………………………………………………………………. Details 1) OFS No & Date 2) Invoice No & Date 3) Invoice Value (excluding Karnataka State levies) 4) Litre Fee paid Sl. Circular No. Sub total Total (4+5+6) Amount (in words) Rs.) Amount (Rs.no. relating to supplies made to you as per the details given below.) 1. No. 2.) (Rs. 3. 3. of carton boxes Rate per CB (Rs.083 Page 33 of 97 .083 dated 27-06-05 Annexure XII Form of debit note for imports from outside the country (to be given in the letter head of the supplier) To M/s. for XYZ Distillery/Supplier Authorised Signatory (Name) Circular No.) 1.

083 Page 34 of 97 .Karnataka State Beverages Corporation Ltd.083 dated 27-06-05 Annexure XIII Details to be printed on one of the longer sides of the carton box Supplies to the KSBCL Name and Address of the Distillery/Brewery ----------------------------------------------------------------------------------------------------------------Excise adhesive numbers From To Circular No. Circular No.

Circular No.Karnataka State Beverages Corporation Ltd.083 Page 35 of 97 . I M L Declared Ex factory Price ( Rs) 250 to 399 400 to 449 450 to 649 650 to 1199 1200 and above 2.083 dated 27-06-05 Annexure XIV Scale of Reimbursement of Duties paid 1. Fenny Declared Ex factory Price ( Rs) 325 and above ED per BL 45 AED per BL 42 Reimbursement Per CB 751 ED per BL 4 4 4 4 4 AED per BL 10 18 48 65 70 Reimbursement Per CB 120 190 449 596 639 ED per BL 4 4 AED per BL 20 22 Reimbursement Per CB 187 202 ED per BL 40 55 55 55 55 AED per BL 45 65 75 90 140 Reimbursement Per CB 734 1036 1123 1252 1684 Circular No. Beer Declared Ex factory Price ( Rs) 125 to 150 151 and above 3. Wine Declared Ex factory Price ( Rs) 400 to 750 751 to 1200 1201 to 2500 2501 to 3000 3001 and above 4.

e. etc. unless. successors-in-interest. of the ONE PART AND M/s………………………………………………………………………………………….. assigns. unless. Beer and Liquor are hereinafter collectively and severally referred to as ‘Liquor’) only to the Corporation..Karnataka State Beverages Corporation Ltd..78.... assigns. shall mean and include its executors.083 Page 36 of 97 . administrators. Wine. shall mean and include its executors.. etc. Bangalore 560027 represented by its General Manager (Operations) Shri James L. day of ………. WHEREAS the advance carries interest at 12 per cent per annum in case the Manufacturer has remitted the duty and 14 per cent per annum in case the Manufacturer proposes to deliver stocks after availing duty advance from the Corporation. Mission Road.. Circular No. WHEREAS the Manufacturer has remitted Excise Duty and Additional Excise Duty to Government of Karnataka in respect of the stocks delivered to the Corporation on an ongoing basis and at its option sought an advance from the Corporation to the extent of the Excise Duty and Additional Excise Duty remitted by it or proposes to deliver stocks to the Corporation on an on-going basis and at its option sought an advance from the Corporation to the extent of the Excise Duty and Additional Excise Duty payable by it for stocks to be delivered.. of the OTHER PART WHEREAS under the Karnataka Excise Act 1965 and the rules made there under. (hereinafter called the ‘Designated Authority’) which term.100/-) AGREEMENT This Agreement made at Bangalore on . repugnant to the context.. No... successors-in-interest...... represented by Shri………………………………………………. repugnant to the context.Ficcker... beer or liquor (all of which.. administrators. Two Thousand Five ( / /2005) between the Karnataka State Beverages Corporation Limited having its registered office at “Seethalakshmi Towers”. (hereinafter called the `Manufacturer’) which term.083 dated 27-06-05 Annexure XV (Agreement to be executed by Manufacturers for Advance against stocks delivered/to be delivered on Stamp Paper of Rs. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS: The Corporation has agreed to extend advances equivalent to the amount of Excise Duty and Additional Excise Duty remitted or to be remitted by the Manufacturer in respect of Circular No.. the Manufacturer shall sell wine.. i. WHEREAS the Corporation with a view to streamline payments to the Manufacturer has from time to time specified its policies...

including interest and other costs as applicable.083 dated 27-06-05 stocks held and supplies received by the Corporation or in respect of stocks to be delivered to the Corporation subject to the following terms and conditions: (i) The amount of advance shall be computed as per the sourcing policy of the Corporation prevailing from time to time and shall be paid against the stocks held or supplies received by the Corporation or proposed to be delivered to the Corporation. while making payment to the Manufacturer against the sales effected. The Corporation shall recover the advances so paid. in which event the Corporation shall not be liable to pay any damages if suffered by the Manufacturer on that account. Circular No. final and binding on both the Parties herein. which may arise between the Parties herein. to the Corporation are fully settled. however at no point of time the total advances so computed shall exceed the amount of Excise Duty and Additional Excise Duty paid by the Manufacturer on the stocks held by the Corporation or proposed to be paid for stocks to be delivered to the Corporation. Interest shall be calculated at the rate of 12 per cent or 14 per cent per annum as the case may be. shall be submitted to arbitration. This agreement shall be in force till such time the advance amount and interest thereon is fully settled by the Manufacturer. The Corporation shall have first charge on all the eligible stocks on which the advance has been paid and the same shall be communicated to its Bankers by the Manufacturer under intimation to the Corporation. (ix) Any dispute.083 Page 37 of 97 . The Corporation shall be at liberty to stop making the advance at any time without assigning any reasons whatsoever and without any prior notice.Karnataka State Beverages Corporation Ltd. losses and damages arising out of the Corporation having extended the advance to it. The Manufacturer/Supplier has agreed with the Circular No. The arbitral award shall be conclusive. (ii) (iii) (iv) (v) (vi) (vii) (viii) The Manufacturer shall at all times adhere to such other conditions that may be imposed by the Corporation either specific to the Manufacturer or to all others in general. The Manufacturer hereby agrees to indemnify and keep the Corporation indemnified at all times against all costs. The Manufacturer may opt to withdraw from this facility by giving at least ten days notice in writing of his intention to do so and shall be relieved from this agreement only after all the dues. on the balance outstanding at the beginning of each week and recovered while making payment to the Manufacturer against the sales effected. on a weekly basis.

083 dated 27-06-05 Corporation to provide for the nomination of a sole arbitrator by the Corporation only from amongst the following: (a) (b) Any retired Judge of the Hon’ble Supreme Court of India. Circular No.Karnataka State Beverages Corporation Ltd. IN WITNESS WHEREOF. The venue for arbitration shall be Bangalore. Indian Law shall apply.083 Page 38 of 97 . 2. For Manufacturer Witness 1. or Any retired Judge of the Hon’ble High Court of Karnataka. For M/s. Karnataka State Beverages Corporation Ltd. The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act. month and year aforementioned in the presence of the following attesting witnesses. Circular No. 1996 as amended or substituted from time to time. the Corporation and Manufacturer have set and subscribed their signatures and seals on the day.

This circular supercedes all previous procedures. so far as it pertains to disposal of liquor. If the buyer so desires. before they can be allowed to transact with the Corporation.01 Stock shall be issued to buyers during working hours. Submission of initial documents June 27.03 Buyers shall be responsible for loading the purchased goods into their vehicle and transport the same to their destination at their risk and cost. A certified copy of the licence granted by the Excise Commissioner under the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules.2005.Karnataka State Beverages Corporation Ltd. Depot Managers shall allow prior inspection of carton boxes before delivery (popularly called open delivery). 2. from the Income Tax Department for collecting tax at a reduced rate under section 206C of the Income Tax Act.084 Liquor sales policy for 2005-06 A detailed procedure for disposal of liquor has been prescribed in various circulars issued by the Corporation from time to time.07. 2005 1. 2.084 Page 39 of 97 . which shall ordinarily be between 12 noon and 6 pm. (i) Details of the organisation of the buyer to be given in its letter head in the format in Annexure I. 1961.02 Ownership of stocks sold to buyers shall pass on to them immediately upon delivery at the depot. Circular No. Issue of stocks (ii) (iii) 2. if any. Certificate. in order to avoid claims for shortages or breakages later. Any damages arising during handling of goods at this stage shall be their responsibility. Buyers are therefore advised to verify the goods before accepting delivery.01 Buyers desirous of procuring liquor from the Corporation shall submit the following documents. 2. 1967 as may be applicable to the buyer. Circular No. Under no circumstances. Issue of stock before or after these hours shall be at the discretion of the depot manager and shall be exceptional. Buyers are requested to take note of the procedure prescribed in this circular which would be effective from 01. shall any claim for damages be entertained after handing over the goods and no depot shall accept return of goods after issue.084 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No. 1.

Bank branches where such payment can be made is given in Annexure II and the account number of the Corporation with these banks is at Annexure III. 3. Such amounts if not paid immediately upon demand shall carry an interest of 14 percent per annum.06 The Sales Invoices raised on the Buyer shall be subject to the terms stipulated in this policy. Further the Corporation is entitled to adjust such amounts out of any payment received or out of any other credit lying in favour of the buyer. 4. Payment for stocks purchased 4. the buyer shall collect the stocks within two hours of receiving the intimation. the Corporation shall not generally sell loose bottles.01 The price to be charged for the stock issued shall be as fixed by the Corporation periodically. 3. short collection of TCS or any other reason. then such stocks may be allotted to the next wholesaler who has registered and is awaiting intimation from the Depot. Corrective action as may be necessary would be taken based on the buyer’s representation.Karnataka State Beverages Corporation Ltd. In the unlikely event of shortage of any particular item. 3. Sale price 3.04 Sale of goods shall be for a minimum value of Rs. 2. Instruments issued by non-scheduled banks. including co-operative banks shall. 2. immediately after such instances are noticed by it.000. the depot manager would distribute the available quantity equitably amongst demanding buyers. the Corporation would not entertain clarifications on the sales invoices raised after two months of the sale. In such cases. The Corporation reserves its right to revise the sale price and such revised prices shall be effective on such dates as may be specified.03 The Corporation is entitled to recover differences due to short billing. price differences.084 Page 40 of 97 .03 Buyers who have an account with any branch of designated banks may transfer the due amount in favour of the Corporation through a challan prescribed by the Corporation.05 The Corporation would endeavour to have adequate stocks to meet any demand from buyers. 4. 4. Even within this limit.01 Issue of stocks shall be against a local Demand Draft or Pay Order or direct credit through account transfer in favour of the Corporation. 25.084 dated 27-06-05 2. If he does not turn up within the stipulated time. generally not be accepted. excess dispatches. Generally. Circular No. No credit sale is allowed. The buyer may seek clarifications in the sales invoices raised by the Corporation within three weeks of the sale.02 The depot manager shall provide a provisional extract of the ledger balance of the buyer as and when so requested which however. Circular No. is subject to final confirmation by the Head Office.02 Demand drafts/Pay Orders issued by scheduled banks alone shall be accepted by the Corporation.

a part of the remittance made by the buyer shall be first appropriated towards tax to be collected. 5. shall approach the first depot and obtain a certificate indicating details of transactions undertaken by him. The Corporation would not pay any interest for the deposit. Circular No. The buyer may enclose the certificate from the Assessing Officer with a covering letter and authenticate the certificate by affixing his signature on its reverse.04 Buyers shall produce a portion of the challan with the confirmation of the bank to the concerned depot based on which goods would be issued. 4. at 1% of the sale price (inclusive of excise duty and other applicable taxes).01 Buyers may return empty beer bottles directly to the brewery.05 Return of the demand draft/pay order shall attract a penalty of Rs. The tax so collected would be remitted by the Head Office and necessary certificates forwarded to concerned depots for onward transmission to buyers. In the absence of such certificate the tax to be collected would be at the prescribed rates and no cognizance would be taken of any certificate for reduced tax collection issued by income tax authorities.01 The Income Tax Act 1961. after which the Corporation shall act upon it. A surcharge and Education Cess is to be added as specified. Buyers may note that confirmation in any other format or by an officer not authorised to issue such confirmation would not be entertained by the Corporation. 5.084 Page 41 of 97 .04 The Corporation shall not refund excess tax collected (due to late submission of a certificate for reduced collection or any other reason) and buyers are advised to seek refund from income tax authorities. They may replenish the deposit periodically. apart from other legal recourse that the Corporation may resort to.084 dated 27-06-05 4.Karnataka State Beverages Corporation Ltd. these rates are subject to change from time to time. Certificates shall be issued at the end of the relevant financial year. However.1. 6. 5. The brewery may accept the bottles so returned and prepare a Goods Receipt Note (GRN) in triplicate. to facilitate collection of tax at source in the other depot.per instance. Bottle returns 6. 4. Tax would be collected at the time of receipt of amount for sale of goods. 5. It may be noted that such certificate shall have to be in favour of the licensee.03 The buyer is entitled to approach the Assessing Officer for issue of a certificate for tax collection at a rate lower than the one prescribed. under section 206C provides for tax collection at source.06 Wholesale licensees may deposit a fixed amount and lift stocks against such deposit.000/.02 Therefore. Tax collection at source 5. Circular No.05 A buyer who generally procures goods from a depot chooses to transact in another depot. 5.

Jurisdiction 7. 7. If the circumstances so warrant.084 dated 27-06-05 indicating the name and address of the buyer and the value of bottles accepted by the brewery. The buyer may lift goods for the net amount so credited to his account.Karnataka State Beverages Corporation Ltd. Review of the policy 8. upon which the depot would pass a credit note crediting the buyer after effecting deductions towards TCS as per clause 5 above. 6. irrespective of where the cause of action or part of it arises.084 Page 42 of 97 .01 Any sale made by the Corporation shall be subject to the exclusive jurisdiction of the Bangalore City Civil Court only. at its sole discretion amend this policy and the same shall be binding on all buyers. (R. the Corporation may.02 The GRN shall be produced in original to the depot. Amounts indicated in any document. shall not be reckoned by the Corporation.01 The above policy is subject to periodic review. other than the GRN. Circular No. 8. Ramaseshan) Managing Director To i) ii) iii) iv) v) vi) vii) viii) All Primary & Composite Distilleries All Manufacturers /Suppliers & Buyers ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File Circular No.

Karnataka State Beverages Corporation Ltd.084 Page 43 of 97 . Circular No.084 dated 27-06-05 Annexure I Details of the organisation of the buyer (To be given in the letter head of the organisation) Name of the organisation: Type of the Company/Partnership/Sole Proprietorship organisation: Particulars of the Chief Name Address Telephone Executive/Managing number Partner/Owner Particulars of the other Name Address Telephone Directors/ Partners. if number any (1) (2) (3) (4) (5) Details of the licence issued by the Excise Commissioner Fax number Fax number Place: Date: Sd/Chief Executive/Managing Partner/Owner (Name) Circular No.

Bangalore – 560 018 Vidhyavardhaka Sangha Sapta Shithama I Block.B. Road. CT. 5th Main Road. Circular No.M. 163/20. Mysore 570002 1st Floor.084 Page 44 of 97 . 9. 82.114. Road Davanagere – 577 008 Ground Floor. 276. 30th Cross. P.G. 13th Cross 30th Main Road.S. M. Renuka Extension Omkarappa Lane. Hassan Kalburgi Plaza. C. Rajajinagar Bangalore – 560 010 Ground Floor. 5854. Jayanagar Bangalore – 560 011 Sri Ram Mandir Association No. Temple Road V V Mohalla.T.084 dated 27-06-05 Annexure II Details of bank branches where direct credit can be made UTI BANK : Location M G Road Bangalore Basaveshwaranagar Bangalore Address No. Congress Road. Lalitha Krupa B. Hubli – 580 029 Ground Floor. Block ‘A” Bangalore – 560 001 Keers Plaze-2000 472. 6th Cross. Chamarajpet. Essel Towers Bunts Hostel Circle.Karnataka State Beverages Corporation Ltd. Indiranagar Bangalore – 560 038 55/5. 80 Feet Main Road. HAL II Stage 100 Feet Road. Tilakwadi Belgaum-500006 No. SIMAZ Diana Circle. 13th Main 4th Block. Udupi Banashankari Bangalore Indiranagar Bangalore Jayanagar Bangalore Chamarajpet Bangalore Rajajinagar Bangalore Belgaum Davanagere Hassan Hubli Mangalore Mysore Udupi Circular No. Road. Mangalore 575001 Haripriya Complex. 'A' Main Road Deshpande Nagar. Bed Extn Banashankari II Stage Bangalore – 560 070 No. 369. Basaveshwara Nagar Bangalore – 560 079 No.

348 100 ft. 4/1.084 Page 45 of 97 . Road.G. BTM Layout Bangalore – 560 076 P. 18. Circular No.B. 1st Main Road Mahalakshmi Layout Rajajinagar. Circle. No.577 002 Koramangala Bangalore Lavelle Road Bangalore Madiwala Bangalore Mahalakshmi Layout Bangalore S.R. BTM I Stage II Main. Road Shanthinagar Bangalore-560 027 Bangalore-Tumkur Road No. 14. John Medical College Post Koramangala Layout Bangalore -560 034 No. 4th Block St.14 Bangarpet 563114 I Floor. 3421.228 Akkammadevi Road II Main. Road B. Industrial Suburb Yeshwantpur Bangalore – 560 022 Site No. 100 ft. Syed Street Chickmagalur-577101 M M K Complex 34/2-A. P J Extension Davangere . Lalbagh Road Sampangirama Nagar Bangalore – 560 027 No. Hosur Main Road Madiwala Bangalore – 560 068 No.084 dated 27-06-05 CANARA BANK : Location BTM Layout Bangalore Address 57 & 58. Sante Maidana Kolar Road. K.1. Bangalore-560086 12/2. Walton Road Lavelle Road Bangalore – 560 001 21/01. 18. Bidar 585401 PB No.19. No. I Floor. 1535. P B No. PB No. Nagar Bangalore Shanthinagar Bangalore Yeshwantpur Bangalore Bangarpet Bidar Chickmagalore Davanagere Circular No.Karnataka State Beverages Corporation Ltd.H. Mohan Market Building Near Bus Stand.

Circular No.1572.Karnataka State Beverages Corporation Ltd. Govt. Shanthi Bhavan 10-1-73. C P Bazaar Sirsi – 581 401 P B No. K C M Building K R Road.B.17.Girls College Mandya – 571 401 P B No. City Talkies Road Raichur – 584 102 P B No. Primary School B M Road Kuashalnagar – 571 234 No. Vidhya Nagar Opp. 15 Quadri Brothers Building Salarjung Road Koppal – 583 231 Opp. No.39 3636/5256. I.084 Page 46 of 97 .9.084 dated 27-06-05 CANARA BANK: P O No.38 Sri Basaveshwara Nilaya Nehru Road Shimoga – 577 201 P B No.45 Near Narasimharaja Circle Malnad House Hassan – 573 201 P.J. Ashoka Road Tumkur – 572 101 Kavi Muddanna Marg Udupi 576101 Hassan Koppal Kushalnagar Mandya Raichur Shimoga Sirsi Tumkur Udupi Circular No.

M. Nagar Bangalore Vijayanagar Bangalore Circular No.T. No. NJSC Bangalore Road. Super Market.G.084 dated 27-06-05 Bellary Bijapur Chickmagalore Gulbarga Mysore Shimoga Address 157. 89. Shinappa Setty Circle Nehru Road Shimoga-577201 Circular No. 6th Cross Yeshwanthpur Bangalore – 560 022 152/1. 6th Main. Yard.21. Vijayanagar Bangalore – 560 040 No. ING VYSYA BANK : Location Yeshwantpur Bangalore Frazer Town Bangalore Malleswaram Bangalore R.084 Page 47 of 97 .B. 6. No. Bellary No.Nagar Bangalore – 560 032 19.2/45. Gulbarga 6 to 9. Malleswaram Bangalore – 560 003 No. Sampige Road 11th Cross.B.38. Srinidhi Shopping Complex T. Wheeler Road Fraser Town Bangalore – 560 005 No. 952-B/20.C. R. 1st Floor Dvarajurs Road Mysore-570001 1st Floor. 87 Chickmagalore-577 101 No.T.Karnataka State Beverages Corporation Ltd. Dinnur Main Road R. Ramsunder Complex M. P. Sangam Building S S Front Road Bijapur-586101 1130. Adichunchunagiri Shopping Complex. Road P.

084 dated 27-06-05 Annexure III Bank account numbers of the Corporation to which direct credit is to be made Sl. No. Circular No.084 Page 48 of 97 .Karnataka State Beverages Corporation Ltd. 1 2 3 Name of the Bank UTI BANK CANARA BANK ING VYSYA BANK Account Number 009010200007849 51116 123011006463 Circular No.

085 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No.2005. 1967. Details of authorised signatories of the manufacturer. A plan (sketch) of the storage yard/room and appurtenant facilities giving details of location of tanks.085 June 27. (ii) (iii) (iv) (v) (vi) (vii) Circular No. piping system. Circular No.. A certified copy of the licence granted by the Excise Commissioner under rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules. if any. 2005 Sourcing policy for rectified spirit and denatured spirit for 2005-06 A detailed procedure for sourcing of rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time. 1. to be given in its letter head as per the format in Annexure III. so far as it pertains to sourcing of rectified spirit and denatured spirit. This circular supercedes all previous procedures. 1967. Suppliers are requested to take note of the procedure prescribed in this circular which would come into effect from 1. under the Karnataka Sales Tax Act and/or the tax index number under VAT/Central Sales Tax Act.7.Karnataka State Beverages Corporation Ltd. Details of the organisation of the manufacturer to be given in its letter head in the format in Annexure I. duly executed by the authorised signatory of the manufacturer in a stamp paper of denomination of Rs. An agreement as in the format in Annexure-IV. who would deal with the Corporation.01 (i) Submission of initial documents All manufacturers of RS/DS shall submit the following initial documents. access doors. along with a copy of the certificate of incorporation or partnership deed and registration from the registrar of firms as the case may be.085 Page 49 of 97 . 1. main gate and other gates used for movement of tankers etc. duty certified by the Distillery Officer as required under clause 3 of Form-1 and clause 3A of Form No-1A of the Karnataka Excise (Distillery & Warehouse) Rules. Details of storage facility available for RS/DS as in format in Annexure-II with copies of calibration certificates issued by the Department of Legal Metrology.100/-. Registration details.

085 dated 27-06-05 (viii) Certified copy of the latest audited accounts and annual report. Manufacturers may note the margin and price their produce accordingly. except (i). A distinct cost sheet shall be given for each product to be issued by the manufacturer. The Basic Declared Price so indicated by the manufacturer plus the applicable duties thereon shall be called the Landed Cost.05 The Corporation may charge a margin on the Landed Cost as may be specified from time to time to arrive at the Sale Price. 2. Basic Declared Price and Landed Cost 2. (ii) and (viii). Circular No. (i) Delivery of more than 3000 litres of RS/DS against one Order for Supplies (OFS) shall be called bulk delivery.Karnataka State Beverages Corporation Ltd.085 Page 50 of 97 . (ii) 2. Delivery of a quantity less than 3000 litres of RS/DS against one OFS shall be called retail delivery. 2. new prices shall become effective from the date of issue of notification by government. The Corporation shall source RS/DS at the Landed Cost.03 The Depot Manager in-charge of the depot shall obtain the declaration(s) in Annexure-V. 1. If such accounts pertain to a period other than the recently concluded financial year.06 In case of any change in the duty structure.01 Manufacturers shall indicate the Basic Declared Price at which they are willing to deliver RS/DS to the Corporation. enter necessary particulars in the system and give a confirmation copy of the prices so entered. 2. They may indicate a distinct Basic Declared Price for retail delivery. Such declarations can be made one day prior to the date on which they would like the prices to be made effective.02 A manufacturer who is a supplier of liquor to the Corporation and has submitted documents in accordance with Liquor Sourcing Policy shall submit all other documents. The Corporation would make necessary changes in the Landed Cost and the Sale Price. They are also free to alter the prices as frequently as they may desire. reasons for not submitting the certified accounts of such year may be indicated. subject to the condition such changes are intimated to the depot one day in advance.02 Manufacturers shall intimate their Basic Declared Price and the Landed Cost to the depot located in their premises in the form as in Annexure-V. 2. 2.04 The categories of Basic Declared Prices that manufacturers may declare shall be as follows. Circular No. They may indicate their Basic Declared Price for bulk delivery.

However. 3. Delay in giving the declaration may result in delay in transmission of details electronically to the head office and cause a consequent delay in the issue of Order for Supplies (OFS). manufacturers are required to declare details of molasses and spirit held by them in Form-01. the manufacturer shall submit the request countersigned by the concerned distillery officer.01 The Manufacturer may. draw spirit for any bonafide use or for the manufacture of potable or non-potable products.01 The Corporation would not participate in any tender inviting offers for supply of spirit. Manufacturers may respond to such Circular No. Forward contracts – supply against tenders 5. Captive consumption 4. The Basic Declared Price indicated for bulk delivery shall be reckoned for computation of the margin payable to the Corporation. 4. A copy of such declaration duly attested by the Distillery Officer shall be delivered to the depot. Wastage in this context would imply quantity of spirit lost in process or during storage and issue. Any margin payable to the Corporation for such quantity would be debited to the manufacturer and adjusted against payments due. Such details would have to be declared by the distillery in the appropriate column in form no. 5.Karnataka State Beverages Corporation Ltd.12.2004.1.02 Rule 25 of the Karnataka Excise (Distilleries and Warehouse) Rules. as allotted by the Excise Commissioner. 3. 1967 stipulates a limit of 1% of wastage. either within the country or outside. 3.02 For drawing the requisite quantity. RS/DS shall be drawn by them only after following the procedure as detailed below. A copy of Form-01 may be seen in Annexure-VI. except in cases of forward contracts. duly signed Annexure-VII and a copy of the allotment order of the Excise Commissioner to the depot. The manufacturer shall thereafter forward a copy of the confirmation of the Distillery Officer certifying that the quantity drawn is as per Annexure-VII.03 The depot would supervise the drawal of spirit in the presence of distillery officer.085 dated 27-06-05 2. Circular No. Violations may attract suitable action from the Corporation.085 Page 51 of 97 . 4. Declaration of stock available for delivery 3.2004 and 24. Such issue (called captive consumption) shall also be canalised through the Corporation.03 The declaration shall be received in the depot of the Corporation located in their distillery before 10 am everyday. 4.07 Manufacturers are obliged to deliver RS/DS at the Landed Cost corresponding to the indicated Basic Declared Price.08.01 As per the directive of the Excise Commissioner vide number ECE/138/RSA/ 2004 dated 31.

085 dated 27-06-05 solicitations. A copy of the concluded contract shall be submitted to the Corporation for record. 6. 5. the credit period allowed would be 30 days from the date of delivery (please see para 9.02 to 5.08 below).02 The stipulations in paras 5. manufacturers may contact prospective customers and conclude contracts for issue of RS/DS at a predetermined price. The Corporation shall not be a party to such disputes. all other buyers shall be required to remit the sale consideration in advance as per the Sales Policy of the Corporation. he shall be responsible for all consequences. Circular No. including compensating the buyer. However. Any delay in payment beyond that period shall attract interest at 12 percent per annum. If a manufacturer obtains an order for such supply. Any OFS issued shall be at the computed Landed Cost. 5. In case of any breach by the buyer.Karnataka State Beverages Corporation Ltd. the manufacturer shall have no claim against the Corporation. In case of any breach of the contract. in such cases. Forward contracts – obligations of the manufacturer 7. 5. Circular No. Forward contracts – negotiated supplies 6. then it shall be specific to it. and shall keep the Corporation fully indemnified in this regard. the price accepted by the buyer through the tender process shall deemed to be the Sale Price and the Landed Cost and the Basic Declared Price shall be computed taking due note of the margin of the Corporation and the duties payable.03 In such cases. Any dispute that may arise in course of the transportation would have to be separately dealt with by the buyer and the agent/manufacturer. ordinarily. including delivering RS/DS at the price contracted.05 The buyer is at liberty to demand delivery at the destination. 7.01 The manufacturer shall be obliged to comply with the terms of the forward contract.085 Page 52 of 97 . The agent/manufacturer would have to bear all transit risks and ensure transportation without misuse/tampering enroute.05 above shall apply to negotiated forward contracts. clearly indicating that the spirit would be issued through the Corporation. In such cases. In case of buyers of anhydrous ethanol. as the ownership of the consignment would have passed on to the buyer immediately upon delivery at the distillery. 5.01 Apart from responding to tenders. 6. the buyer may either have an agent to transport the consignment or designate the manufacturer as its agent.02 Any agreement concluded between the manufacturer and the buyer shall contain the clauses indicated in Annexure VIII and a copy of the agreement shall be submitted to the Corporation for record. the validity and quantity of the contract shall be in accordance with the allotment order of the Excise Commissioner.04 Except in cases of buyers of anhydrous ethanol.

shall place an Order for Supplies (OFS) to the manufacturer.085 dated 27-06-05 7. 8.02 The OFS would indicate the validity date within which the buyer shall take delivery of the item and the manufacturer is obliged to deliver the quantity indicated in the OFS to the buyer as indicated therein.01 The head office of the Corporation in case of bulk delivery and the depot in case of retail delivery. Circular No. Circular No. In case of revision in Landed Cost due to change in duties.01 Manufacturers shall deliver RS/DS as per the OFS issued by the Corporation. 8.1. Necessary arrangements may be made by manufacturers to ensure that delivery is not hampered/denied to any buyer who comes during working hours.04 The Corporation shall have the discretion to foreclose/cancel the OFS issued. A copy of the OFS (whether issued by the head office or the depot) shall be signed by the depot manager and delivered to the manufacturer while taking delivery. pending OFS would be revised or cancelled and fresh OFS issued. the contract or the breach of the same is with an intention to circumvent or defeat its policies. It is up to them to undertake suitable measures as may be necessary. Manufacturers are therefore advised to inform well in advance about any likely delay/inability in honouring the OFS issued. Issue of stock before or after these hours shall be at the discretion of the depot manager and shall be exceptional. It shall be their responsibility to remit applicable duties to government before giving delivery to the Corporation. 9. It may. if in its opinion. Issue of Order for Supplies 8. arrange alternate supply of RS/DS to the buyer and recover any additional cost that may be so incurred from the manufacturer. after the latter has made all arrangements to obtain delivery. Delivery 9.000/. leading to accumulation of RS/DS. 9. which shall ordinarily be between 10 am and 4 pm.Karnataka State Beverages Corporation Ltd. if the circumstances so warrant. 8. 8.02 Delivery shall be during working hours of the depot. the cost of arranging for delivery at Rs.per day would be recovered.02 The Corporation reserves its right to force specific performance of the forward contract.03 If any manufacturer fails to give delivery against an OFS issued by the Corporation.05 Manufacturers may note that any pending OFS issued by the Corporation shall be honoured by them at the old prices. It would issue OFS to a manufacturer. as per the allotment order of the Excise Commissioner. 8. 8.06 The Corporation is only a canalising agency and is not involved in the marketing of the produce.085 Page 53 of 97 . It may therefore be noted that manufacturers cannot hold the Corporation responsible if no OFS is issued.

All risks during the transit would therefore be borne by the buyer. 1967.03 In case of delivery of DS. such excess quantity cannot be termed as wastage. Copies of electronic print outs of weights recorded as per para 9. where the buyer has difficulties in taking delivery in one lot. “name and address of the end user”. Circular No. Circular No. only after which documents for sale would be released. 9. the manufacturer shall use the denaturant as indicated by the buyer in accordance with rule 2(c) of the Karnataka Excise (Denatured Spirit and Denatured Spirituous Preparations) Rules.08 The following documents shall be submitted while giving delivery. Sales invoices for the quantity delivered.085 Page 54 of 97 . Such excess issue which is quite natural due to limitations of equipment and gauging shall be accounted in a supplementary authorisation for the difference between the quantity actually issued and the quantity originally authorised. No revision in price.04. shall be captured as “consignee”. 9.04 Every vehicle coming for taking delivery shall be inspected by the manufacturer for its fitness for transportation of spirit. The invoice rate shall be as indicated in the OFS. delivery of the quantity indicated in an OFS shall be through a single invoice of the manufacturer. The second copy of the invoice shall be forwarded to the consignee for reference and records.09 If the quantity of spirit issued is in excess of the quantity authorised by the Corporation (either for captive consumption or for outside users). The buyer shall be responsible for transporting the delivered spirit to its premises of use. and Test certificate of the sample as in Annexure IX. Copies of electronic print outs of the weights recorded shall be produced to the depot. After satisfying the fitness.07 Normally. either contemplated or actually made effective.05 An exclusive invoice shall be raised by the manufacturer for every OFS issued and they shall invariably quote the reference number and date of the OFS issued by the Corporation in their invoice.06 Manufacturers shall note that while raising invoice for DS. shall be reckoned for deliveries made for pending OFS.085 dated 27-06-05 9. in exceptional cases. 10. 9. 9.10 Ownership of RS/DS delivered to buyers shall pass on to them immediately after delivery at the depot.01 The manufacturer is expected to ensure that the items delivered to the Corporation adhere to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable. 9. The manufacturer would be responsible for remitting duty in respect of such difference quantity. more than one invoice for an OFS may be accepted.Karnataka State Beverages Corporation Ltd. as in OFS. the vehicle shall be weighed before loading (the tare weight) and after loading (the gross weight). 9. However. (i) (ii) (iii) (iv) Details of duty remitted for the quantities delivered. 9. Adherence to quality 10.

If the test result varies substantially.02 The amount payable to a manufacturer for the sales recorded between Monday and Saturday shall be computed and paid on Wednesday next. the third sample would be tested in a reputed laboratory and if such testing confirms the variation in quality. However. Circular No. Such amounts will be released on the Wednesday succeeding the day on which the payment is received from the buyer.03 Every consignment delivered by the manufacturer shall be subjected to joint sampling. three samples of 375 ml each shall be jointly drawn from the delivered consignment by drawing samples from all the sub-tanks of the tanker. To facilitate such transfer. If more than one tank/vat is used for delivery. 11. These bottles shall be sealed. 11. No payment by any other mode is allowed.085 dated 27-06-05 10. Any missing data due to delays/failures in electronic transfer of data shall be reckoned in the succeeding week and adjusted. 11. the identification label provided by the Corporation affixed.03 Any amounts to be recovered from the manufacturer shall be recovered out of the amounts payable. 10. Two samples of 375 ml each shall be jointly drawn from each storage tank/vat from which the delivery is effected. the identification label provided by the Corporation affixed. Payment for stocks sold 11.01 The Corporation shall pay the manufacturer only for the stocks sold to buyers.04 After delivery of the consignment to the tanker.02 Manufacturers shall be liable for any action that may arise due to non adherence to quality parameters. then samples from each such tank/vat shall be drawn.085 Page 55 of 97 . 10. the Corporation may initiate such action as may be appropriate in the circumstances.05 The Corporation may test the sample in its custody to confirm the declared test results. They shall keep the Corporation indemnified at all times in this regard. manufacturers/suppliers shall open an account with any one of the bankers to the Corporation or maintain an account with a bank having RTGS facility. 11. mixed and filled to bottles. Circular No. 10.Karnataka State Beverages Corporation Ltd. The third sample shall be tested by the manufacturer and a certificate as in Annexure-IX given to the depot before dispatch. signed by the representative of the manufacturer and the depot manager and handed over to the depot. signed by the representative of the manufacturer and the depot manager and handed over to the depot.04 Payment by the Corporation would only be through a transfer directly to the bank account of the manufacturer. Details of the banks where the Corporation has its accounts may be seen in Annexure-X. Unsold stock lying in the custody of the manufacturer shall not be eligible for any payment. Two of the samples shall be sealed. sales which have been made on credit basis shall be excluded for reckoning payment.

Thus the Sale Price shall be the same as the Landed Cost. no such difference shall be entertained by the Corporation after two months of the close of the financial year. Jurisdiction 14.05 The Corporation would not be a party to any bill discounting or factoring arrangements that the manufacturer may enter into with his bank. at present. 12. Any adjustment necessary would be made after such verification. They may verify the same and indicate variations. the Corporation may. Margin 13. If the circumstances so warrant. Review of the policy 15.085 Page 56 of 97 .ksbcl. at its sole discretion amend this policy and the same shall be binding on all manufacturers. Circular No. 15. 13.Karnataka State Beverages Corporation Ltd. Accounts 12.01 The above policy is subject to periodic review. (R. Ramaseshan) Managing Director To i) ii) iii) iv) v) vi) vii) viii) All Primary & Composite Distilleries All Manufacturers & Suppliers ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File Circular No.01 The Corporation would provide details of transactions of a manufacturer in its website (www. if any. 14.085 dated 27-06-05 11.com).01 All transactions of the Corporation with the Manufacturer shall be subject to the exclusive jurisdiction of Bangalore.01 There shall be no margin on the Landed Cost. However.

085 Page 57 of 97 .Karnataka State Beverages Corporation Ltd. Circular No.085 dated 27-06-05 Annexure I Details of the organisation of the manufacturer/supplier (To be given in the letter head of the organisation) Name of the organisation: Type of the organisation: Documents enclosed Company/Partnership/Sole Proprietorship Certificate of incorporation/Partnership deed and registration from the registrar of firms Particulars of the Chief Name Address Telephone Fax Executive/Managing number number Partner/Owner Particulars of the other Name Address Telephone Fax Directors/ Partners number number (1) (2) (3) (4) (5) Address for correspondence E mail id Particulars of the bank where payments are to be credited a) Name of the bank b) Branch c) Account number Place: Date: Sd/Chief Executive/Managing Partner/Owner (Name) Circular No.

Storage tank identity Locking Enclosures Yes/No Capacity (in litres) Calibrated on Place: Date: Sd/Chief Executive/Managing Partner/Owner (Name) Circular No. 4.085 Page 58 of 97 . 2. Description of No. Circular No.085 dated 27-06-05 Annexure II Details of RS/DS storage details (to be given in the letter head of the organisation) Sl. 3. the product 1.Karnataka State Beverages Corporation Ltd.

085 Page 59 of 97 .Karnataka State Beverages Corporation Ltd.085 dated 27-06-05 Annexure III Details of authorised signatories to deal with the Corporation on behalf of the manufacturer (To be given in the letter head of the organisation) Name of the signatory Designation Address Telephone number Mobile number E mail id Specimen signature (1) (2) (1) (2) Place: Date: Sd/Chief Executive/Managing Partner/Owner (Name) Circular No. Circular No.

repugnant to the context.78.. Two Thousand Five ( / /2005) between the Karnataka State Beverages Corporation Limited having its registered office at “Seethalakshmi Towers”. successors-in-interest. represented by Shri………………………………………………. Bangalore 560027 represented by its General Manager (Operations) Shri H. of the ONE PART AND M/s…………………………………………………………………………………………. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS: 1. assigns.. WHEREAS the Manufacturer is a licensee under Rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules. successors-in-interest... No. shall mean and include its executors. 1968. 1967.Karnataka State Beverages Corporation Ltd.. unless... WHEREAS the Corporation is a licensee under Rule 3(11) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules.. in accordance with the procedure stipulated by the Corporation from time to time. Ramesh Chand. day of . administrators.085 Page 60 of 97 ...C. (hereinafter called the `Manufacturer’) which term. the Manufacturer as a licensee under the relevant rules shall issue Rectified Spirit or Denatured Spirit (both of which are hereinafter collectively and severally referred to as ‘Spirit’) only to the Corporation.. WHEREAS under rule 31A of Karnataka Excise (Distillery and Warehouse) Rules.. declare the stock available for issue and the price of issue. shall mean and include its executors.. repugnant to the context. 1.. Mission Road.. 1967. Circular No. is a Government Company within the meaning of Section 617 of the said Act.. administrators.. 100/-) AGREEMENT This Agreement made at Bangalore on …………. WHEREAS the parties herein have entered into this Agreement for the issue of Spirit on the following terms and conditions. 1956. assigns. etc. (hereinafter called the ‘Corporation’) which term. of the OTHER PART WHEREAS the Corporation registered under the Companies Act.085 dated 27-06-05 Annexure IV Agreement to be executed by manufacturers located in the State (To be executed in stamp paper of denomination Rs. unless. etc.1 Stock available for issue The Manufacturer shall.. Circular No.

2 4. The Corporation may also test such samples and if the result as declared by the Manufacturer varies substantially from the results obtained by its testing. 1. 3.3 2. on the captive consumption of the Manufacturer Quality The Spirit issued shall adhere to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable. 4.3 Circular No.3 2. Delivery The Manufacturer shall deliver Spirit to the Corporation for onward delivery to the buyer in accordance with the Order for Supplies (OFS) issued by the Corporation. The Manufacturer shall be responsible for the quality and quantity of Spirit issued. Circular No. Any disputes/claims arising from the delivery of Spirit to the buyer.085 dated 27-06-05 1. Non-delivery and/or repeated delays in adhering to the delivery schedule may entail in recall of the pending Orders for Supplies and may attract other penalties as may be imposed by the Corporation. Delivery shall be in line with the Orders for Supplies placed by the Corporation and shall be completed within the period specified by the Corporation. as may be reasonable. as allotted by the Excise Commissioner.2 4.1 2.1 3. The quantity of Spirit delivered shall be measured by appropriate means and/or weighing the receptacle/vehicle before and after delivery.4 3.2 2. 2. Captive consumption The Manufacturer may.Karnataka State Beverages Corporation Ltd.085 Page 61 of 97 . The Manufacturer shall test samples of Spirit delivered and declare the test results to the Corporation. The Manufacturer shall not claim the right of issue of Spirit to the Corporation. draw Spirit for any bonafide use or for the manufacture of potable or non-potable products. the Corporation may initiate such action as may be necessary.1 4.2 The quantity of Spirit to be issued shall be in accordance with the allotment order of the Excise Commissioner. shall be settled by the Manufacturer. The Corporation may impose such conditions.

In case of forward contracts for issue of Spirit at a predetermined price. The Manufacturer shall be responsible for adhering to the conditions/ commitments of the tender. the validity and quantity of the contract shall be in accordance with the allotment order of the Excise Commissioner.4 5. where the contract or the breach of the same is with an intention to circumvent or defeat its policies.1 7. the Manufacturer shall be entitled for receiving payment for Spirit issued only after the buyer makes such payment to the Corporation. 5.Karnataka State Beverages Corporation Ltd. employees. agents.2 5.3 5. 6. 7.085 Page 62 of 97 ..085 dated 27-06-05 The Manufacturer may participate in tenders solicited by users of Spirit either within the country or outside. Cancellation of orders The Corporation shall.5 6. if any. While the Manufacturer is free to quote a price for Spirit. Export of spirit The Manufacturer may export Spirit to other States only through the Corporation including to their own units and such export shall be in accordance with the allotment order of the Excise Commissioner. The Corporation shall have right to enforce specific performance of the forward contract. without prejudice to its legal rights.1 Circular No. if the Manufacturer or any of his representatives. or 5. If warranted.1 Participation in tenders Circular No. He shall be liable for any consequence arising out of noncompliance of such conditions/commitments and shall keep the Corporation fully indemnified in this regard. 5. etc. the Corporation would arrange alternate supply of Spirit to the buyer and recover any additional cost incurred from the Manufacturer. In such cases where credit delivery is allowed by the Corporation. have the right to forthwith terminate any or all Order for Supplies placed on the Manufacturer and forfeit deposits. he shall clearly indicate that issue of Spirit shall be through the Corporation and is subject to the policies of the Government and the Corporation prevailing from time to time. Save in cases specifically exempted by the Corporation. (a) indulge in any activity which is directly or indirectly prejudicial to the interest of the Corporation. workers. the Manufacturer shall not accept supply of Spirit on credit.

the Corporation shall have the right to cancel the Order for Supplies placed on the Manufacturer. including timely remittance of tax dues and filing of returns. voucher or delivery challan or commit any offence in connection with the manufacture and supply of Spirit. 12. Facilities to be offered The Manufacturer shall offer all facilities to the Corporation and the respective depots established at their premises to supervise the activities relating to issue of spirit.2 All losses incurred by the Corporation on account of the Manufacturer. Price Manufacturers shall indicate the Basic Declared Price at which they are willing to deliver Spirit to the Corporation. without delay.085 Page 63 of 97 . 7.Karnataka State Beverages Corporation Ltd. which offence is punishable under law. More particularly. 11.1 11. The Basic Declared Price so indicated by the Manufacturer plus the applicable duties thereon shall be called the Landed Cost. the Party being affected by such event shall. bill. (b) Circular No. etc. representing the basic declared price plus the applicable duties thereon and the margin of the Corporation.085 dated 27-06-05 indulge in forgery. 10. shall be recovered from the Manufacturer. the Corporation shall have unhindered access to all manufacturing and appurtenant facilities for recording details as per the administrative instructions of the Excise Commissioner issued from time to time. notify the other Party in writing. if any. The Corporation shall source Spirit at the Landed Cost. the price accepted by the buyer shall be the sale price.1 12. falsification. 7.1 8. which are applicable for him.3 8.1 Circular No. Payment Payment for the Spirit delivered shall be subject to any periodicity that may be specified by the Corporation. In case of forward contracts/supply against tenders. If the Manufacturer indulges in any unfair trade practice. 8. Compliance with laws The Manufacturer/Supplier shall comply with the requirements of all laws. workmen. 9. his agents. fabrication of any document. Force majeure Upon the occurrence of any event of force majeure. committing the above said prohibited acts.1 10. employees.2 9.

13.1 The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act. 14. 13.1 Indemnity The Manufacturer shall keep the Corporation harmless and indemnified in all matters arising from the issue/delivery of Spirit to the Corporation and its buyers. 14. The occurrence of the event of force majeure will not relieve either party from performing its obligations at such times and to the extent as may be possible after the intervention of the event of force majeure. Non-conformation to the provisions of various laws in force. natural disaster. fire. final and binding on both the Parties herein.085 Page 64 of 97 . Any third party claims arising from any user shall be settled by the Manufacturer at his cost. The arbitral award shall be conclusive. the Manufacturer shall specifically indemnify the Corporation and keep it harmless with respect to (i) (ii) Non-compliance with the standards specified by the Corporation. the non-remittance and short remittance towards the duties statutorily payable. 14. such as war. to that extent. be exempted during the period of such happening from the liabilities that would otherwise result from its failure.2 (iii) Quality claims that may be raised by any user or the ultimate consumer of Spirit. (iv) Claims for damages that may be raised by any user or the ultimate consumer due to delay in delivery of Spirit by the Manufacturer. the Party so failing shall. 12. The venue for arbitration shall be Bangalore. Circular No. which may arise between the Parties herein shall be submitted to arbitration. losses or claims (including claims of additional duty raised by the Government of Karnataka) more specifically.2 Circular No. and consequences. Indian Law shall apply.Karnataka State Beverages Corporation Ltd. The Manufacturer/Supplier has agreed with the Corporation to provide for the nomination of a sole arbitrator by the Corporation only from amongst the following: (a) (b) Any retired Judge of the Hon’ble Supreme Court of India .1.085 dated 27-06-05 In the event of any failure in performance due to any force majeure condition. Without prejudice to the generality of the circumstances contained in 14. or any other cause whatsoever beyond the control of the Party being affected. Arbitration Any dispute. 1996 as amended or substituted from time to time. or Any retired Judge of the Hon’ble High Court of Karnataka. strike.

16.085 Page 65 of 97 .1 IN WITNESS WHEREOF. 2. Ramesh Chand General Manager (Operations) Witnesses: 1. the Manufacturer is liable to compensate the Corporation for any loss suffered by it due to any act of commission or omission by the Manufacturer.1 Jurisdiction Both the parties are amenable to the exclusive jurisdiction of the Bangalore City Civil Court only irrespective of where the cause of action or a part of it arises.C. Circular No. 16. 15.085 dated 27-06-05 (v) Any claims from buyers under the forward contracts entered into between the manufacturer and buyer as per clause 5-7 of the Sourcing Policy of the Corporation for Rectified Spirits/Denatured Spirits and/or as per clause 3-5 of the Sales Policy of the Corporation for Rectified Spirits/Denatured Spirits. Circular No. the Corporation and Manufacturer have set and subscribed their signatures and seals on the day. 15.Karnataka State Beverages Corporation Ltd. Damages Notwithstanding any clause hereinabove. month and year aforementioned in the presence of the following attesting witnesses for Karnataka State Beverages Corporation Limited for Manufacturer/Supplier H.

Circular No.085 dated 27-06-05 Annexure V Declaration of Basic Declared Price of RS/DS by the manufacturer (To be given in the letter head of the manufacturer) (i) Basic Declared Price of RS and other spirits Particulars (i) Basic Declared Price of the manufacturer (ii) Duty as applicable (iii) Landed Cost to KSBCL [(i)+(ii)] Category of delivery Bulk Retail (ii) Basic Declared Price of DS Particulars (i) Basic Declared Price of the manufacturer (ii) Cost of denaturant (iii) Duty as applicable (a) CED (at 16%) (b) Cess on CED (at 2%) (c) Litre fee (d) Transport fee (e) Permit fee (f) Others (iv) Landed Cost to KSBCL [(i)+(ii)+(iii)] Category of delivery Bulk Retail Place: Date: Sd/Authorised signatory (Name) Circular No.085 Page 66 of 97 .Karnataka State Beverages Corporation Ltd.

of order no. No.085 Page 67 of 97 . Item On the day of report From 1st of the month From 1st July to date of report I 1 2 3 4 5 6 7 8 II 1 2 3 4 MOLASSES Opening balance Receipt from sugar factory attached to the distillery Receipt from other sugar factories and Khandsari units Total 1+2+3 Issues for distillation Grade A Grade B Grade C Total Closing Balance Grade A Grade B Total Storage losses RECTIFIED SPIRIT (Above 66 op) Opening balance Production Redistilled Total Issues (details given below) Sl.01 Distillery Name Date Sl. Name Allotment Purpose No. Circular No.Karnataka State Beverages Corporation Ltd.085 dated 27-06-05 Annexure VI Format for declaration of stock available FORM NO. licence Arrack Redistilled IML Chemical/Manufacture of DS Circular No.

085 dated 27-06-05 On the day of report From 1st of the month From 1st July to date of report Others Export 5 6 7 III 1 2 3 4 Total Closing Balance Storage Losses RECTIFIED SPIRIT (Below 65 op) Opening Balance Production in distillery Total Issues (details given below) Sl. licence Arrack Redistilled IML Chemical/Manufacture of DS Others Export Closing Balance Storage Losses DENATURED SPIRIT Opening balance Quantity of RS below/above 65 UP received for DS Absolute alcohol received for DS Quantity of DS manufactured Total Issues (details given below) Sl. Name Allotment Purpose No. No.085 Page 68 of 97 . Item Circular No. Sl. licence 5 6 IV 1 2 3 4 5 Circular No.Karnataka State Beverages Corporation Ltd. of order no. Name Allotment Purpose No. of order no.

Karnataka State Beverages Corporation Ltd. licence Others Export 8 9 10 VI 1 2 3 4 Total Closing balance Losses ABSOLUTE ALCOHOL Opening balance Production in the distillery Total Issues (details to be given) Sl. Name Allotment Purpose No. Sl. Item Circular No. of order no. Name Allotment Purpose No.085 Page 69 of 97 . of order no. licence Total 5 Closing balance 6 Storage Losses VII MALT SPIRIT 1 Opening balance 2 Production in the distillery Circular No.085 dated 27-06-05 On the day of report From 1st of the month From 1st July to date of report 6 7 V 1 2 3 4 5 6 7 Closing Balance Losses NEUTRAL SPIRIT Opening balance Quantity of RS received from distillery for distillation Quantity of Neutral spirit manufactured Quantity of RS below 65 op manufactured Quantity of NS received from distillery and other distilleries Total Issues (details to be given) Sl. No.

Karnataka State Beverages Corporation Ltd. Name Allotment Purpose No. Item Circular No. Sl. No.085 Page 70 of 97 . licence 5 6 Total Closing balance Storage losses Signature of the Distillery Officer Signature of the Licensee Circular No. of order no.085 dated 27-06-05 On the day of report From 1st of the month From 1st July to date of report 3 4 Total Issues (details to be given) Sl.

085 Page 71 of 97 .Karnataka State Beverages Corporation Ltd. Circular No. No Description of the product Date of Drawal Quantity as per Annex-VII Actual Quantity drawn Details of duty remitted Total Balance quantity (bulk litres) available : Proposed Quantity (bulk litres) to be drawn : Sl.085 dated 27-06-05 Annexure VII Request for drawing RS/DS for captive consumption (To be given in the letter head of the manufacturer) Request number ………… (to be serially numbered for the year) Request date Allotment Order of Excise Commissioner Reference No. Quantity allotted (bulk litres) : date Validity Details of Quantity utilised (bulk litres) against Allotment Order: Sl. No Description of the product Purpose Quantity to be drawn Proposed Date Details of duty remitted Total Place: Date: Sd/Authorised signatory (Name) Circular No.

Circular No. Circular No.Karnataka State Beverages Corporation Ltd. 3) More specifically. 2) The seller shall be liable for any consequences arising out of non-compliance of such conditions/commitments of the contract and he shall keep the Corporation full indemnified for any consequences that would arise due to breach of contract by either of the parties.085 dated 27-06-05 Annexure VIII Clauses to be incorporated in the agreement between the buyer and the manufacturer selected through a tender/negotiation process 1) The parties hereby agree that the seller shall issue and the buyer shall purchase rectified spirit/denatured spirit as the case may be only through the Karnataka State Beverages Corporation Limited. the Corporation shall not be liable and shall be kept indemnified by the seller at all times against any claims for losses/damages due to nondelivery of spirit by the seller or default in payment of contracted price by the buyer. the distributor licensee under the Karnataka Excise Act and Rules made thereunder.085 Page 72 of 97 .

Karnataka State Beverages Corporation Ltd. Manufacturers invoice number and date Serial No. of the security seals in the vehicle Type of spirit Quantity delivered Temperature of the delivery Strength of spirit (in 0 OP) Specific gravity of spirit delivered Tare weight of the vehicle (in kgs) Gross weight of the vehicle (in kgs) Weight of the spirit delivered (in kgs) Satisfactory / Poor Place: Date: Sd/(Authorised signatory) Circular No.085 Page 73 of 97 .085 dated 27-06-05 Annexure IX Certification of RS/DS delivered (To be given on the letter head of the manufacturer) Date & time of dispatch Vehicle number Fitness of the vehicle KSBCL OFS No. Circular No.

Road.Karnataka State Beverages Corporation Ltd.No.085 Page 74 of 97 .H. J. Shanthinagar Bangalore-560027 5 UTI Bank M. Road. Name of the bank 1 Canara Bank Name of the branch Avenue Road Branch Bangalore – 560 002 2 Corporation Bank K.085 dated 27-06-05 Annexure X Details of banks where the Corporation has its accounts Sl. Road Bangalore-560001 Circular No.P.H.G. Nagar Bangalore-560078 4 ING Vysya Bank Limited K. Circular No. Shanthinagar Bangalore-560027 3 IDBI Bank Sarakki Branch.

01 (i) Categorisation of buyers Buyers of RS would be categorised as under. before their request can be considered and action initiated.Karnataka State Beverages Corporation Ltd. RS2 and RS6 licencees) sourcing less than 3000 litres in an instance.01 All buyers of RS/DS desirous of procuring RS/DS from the Corporation shall submit the following documents. This circular supercedes all previous procedures. 2005 Sales policy for rectified spirit and denatured spirit for 2005-06 A detailed procedure of sales policy for rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time.086 June 27. Bulk buyers holding DL2 or DL3 licence sourcing more than 3000 litres in an instance.086 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No. Retail buyers (RS1.2005. Retail buyers holding a DL2 or DL 3 licence sourcing less than 3000 litres in an instance. 2. Submission of initial documents (ii) (iii) 1. Circular No. Circular No. (i) A certified copy of the licence issued by the competent authority under the RS rules or the DS rules and a copy of the licence granted by the Excise Commissioner under rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules.086 Page 75 of 97 . Bulk buyers like IML and arrack manufacturers and other licencees sourcing more than 3000 litres in an instance. Buyers of all other spirits other than denatured spirit. 1967 as may be applicable.7. 1.02 (i) (ii) 2. Buyers are requested to take note of the procedure prescribed in this circular which would come into effect from 1. so far as it pertains to sale of rectified spirit and denatured spirit. 1. would be categorised as bulk buyers irrespective of the quantity Buyers of DS would be categorised as under.

under the Karnataka Sales Tax Act and/or tax index number under VAT/the Central Sales Tax Act.02 In addition to the above. 3. All other documents shall be submitted. (iii) 2. Allotment order from the competent authority specifying the quantity of RS/DS that can be sourced. Buyers may invite offers for supply from manufacturers in the state. 3.03 Retail buyers of RS/DS shall submit the aforesaid documents to the depot from where they intend to source RS/DS.086 Page 76 of 97 . 2. (ii) (iii) 2. 3. the manufacturer selected by the buyer shall issue RS/DS only through the Corporation. reasons for not submitting the certified accounts of such year may be indicated.02 The supply price quoted by the manufacturer in response to the tender shall be the Sale Price of RS/DS of the Corporation. Circular No. (i) Details of the organisation of the buyer to be given in its letter head in the format in Annexure-I.Karnataka State Beverages Corporation Ltd. Special conditions regarding payment and delivery in such cases may be noted by buyers calling for offers.02 (i) and (iii) above. Certified copy of the latest audited accounts and annual report. if any. Bulk buyers of RS/DS shall submit these documents to the head office of the Corporation.01 The Corporation would not participate in any invitation for offers for supply of RS/DS solicited by buyers. bulk buyers of RS/DS are required to give the following documents. Details of authorised signatories to deal with the Corporation to be given in its letter head as per the format in Annexure-II.04 A bulk buyer of RS who is a supplier of IML to the Corporation and has submitted initial documents in accordance with the Liquor Sourcing Policy 2005-06 need not submit documents 2.03 Any agreement concluded between the manufacturer and the buyer shall contain the clauses indicated in Annexure III and a copy of the agreement shall be submitted to the Corporation for record. Forward contracts – inviting offers for supply 3. If such accounts pertain to a period other than the recently concluded financial year.01 (i) and 2. however. Circular No.086 dated 27-06-05 (ii) Registration details.

02 to 3. 5.086 dated 27-06-05 3. the agent/manufacturer would have to bear all transit risks and ensure transportation without misuse/tampering enroute.01 (i) (ii) Request for sourcing RS/DS Buyers shall submit the following documents for sourcing RS. including compensating the manufacturer. It may.02 The Corporation reserves its right to force specific performance of the forward contract. 4. the credit period allowed would be 30 days from the date of delivery (please see para 10.05 above shall apply to negotiated forward contracts.01 The buyer shall be obliged to comply with the terms of the forward contract.06 below). as the ownership of the consignment would have passed on to the buyer immediately upon delivery at the distillery. In the case of buyers of anhydrous ethanol. 5. In case of any breach by the manufacturer. the contract or the breach of the same is with an intention to circumvent or defeat its policies. buyers may contact prospective manufacturers and conclude contracts for issue of RS/DS at a predetermined price. In such cases. Order of the Excise Commissioner permitting sourcing of RS. Any dispute that may arise in course of the transportation would have to be separately dealt with by the buyer and the agent/manufacturer. Forward contracts – negotiated supplies 4. if in its opinion. the buyer shall have no claim against the Corporation.086 Page 77 of 97 .05 The buyer is at liberty to demand delivery at the destination. the validity and quantity of the contract shall be in accordance with the allotment order of the Excise Commissioner. he shall be responsible for all consequences. In case any of any breach of the contract. ordinarily. However. Any delay in payment beyond that period shall attract interest at 12 percent per annum. allow issue of RS/DS by the manufacturer to alternate buyers and any loss so incurred by the manufacturer shall be recovered from the buyer. Circular No. Circular No.04 Except in cases of buyers of anhydrous ethanol. 4. A copy of the concluded contract shall be submitted to the Corporation for record.01 Apart from responding to tenders. in such cases.02 The stipulations in paras 3. the buyer may either have an agent to transport the consignment or designate the manufacturer as its agent. 3. all other buyers shall be required to remit the sale consideration in advance (please refer para 8). 6. 6. including sourcing RS/DS at the price contracted. Forward contracts – obligations of the buyer 5. and shall keep the Corporation fully indemnified in this regard.Karnataka State Beverages Corporation Ltd. Sale value of the RS proposed to be sourced (remitted as per para 8 below). if the circumstances so warrant. The Corporation shall not be a party to such disputes. In such cases.

including co-operative banks shall not be accepted. Details of denaturant in accordance with rule 2 (c) of the DS rules. Sale price 7.086 dated 27-06-05 Request letter for providing security guard to escort the vehicle on the scheduled date of delivery.03 Bulk buyers of RS/DS may pay the sale consideration through a Demand Draft/Pay Order payable in Bangalore. Instruments issued by non scheduled banks. 8. 8. Thus the sale price would vary across various primary distilleries. delivered at the depot.Karnataka State Beverages Corporation Ltd.01 Sale price of RS/DS shall be at a margin over the Landed Cost.04 above. 8.02 (i) (ii) (iv) (v) 6.06 For a direct transfer. except in cases mentioned in para 3. (iii) Circular No. bulk buyers are required to maintain an account with the bankers to the Corporation and issue instructions for the transfer through a prescribed challan.05 Demand drafts/Pay Orders issued by scheduled banks alone are accepted by the Corporation.1000/.03 Bulk buyers of RS/DS shall submit these documents to the head office of the Corporation and retail buyers to the depot from where they intend to source RS/DS. Return of the demand draft/pay order shall attract a penalty of Rs. 8. they may transfer the sale consideration directly to the bank account of the Corporation as indicated in AnnexureIV.086 Page 78 of 97 . Payment for stocks purchased 8. Buyers of DS shall submit the following documents for sourcing DS.per instance. 7. 8.02 Sale to retail buyers of RS/DS shall be against a Demand Draft or a Pay Order drawn in favour of the Corporation payable at Bangalore. In the alternative. and Sale value of the DS proposed to be sourced (remitted as per para 8 below). They may replenish the deposit periodically.01 The Corporation does not allow credit sale of RS/DS to any buyer. Landed cost shall mean the Basic Declared Price indicated by the seller from time to time plus the applicable duty thereon. Order of the Excise Commissioner permitting sourcing of DS. The Corporation would not pay any interest for the deposit. apart from other legal recourse that the Corporation may resort to. 8. 6.04 Buyers may deposit a fixed amount through either of the modes described above and obtain spirit against such deposit. The account number to which the amount has to be directly transferred may be Circular No. Request letter for providing security guard to escort the vehicle on the scheduled date of delivery.

10. which shall ordinarily be between 10 am and 4 pm.07 Buyers who are suppliers of IML to the Corporation may request for retention of a specified amount out of the payment due to them for IML sold. Requests given beyond 12. Delivery 10. the depot concerned shall place an OFS to the supplier and issue the AFIP to the buyer. To ascertain that the transaction is within the same legal entity.01 RS/DS shall be issued to buyers during working hours of the depot. Further.05 Request for issue of OFS on emergent basis would be entertained only on an exceptional basis. In such cases.Karnataka State Beverages Corporation Ltd.00 AM on the following day. as may be applicable shall be remitted. necessary documentary proof to this effect shall be produced by the buyer.03 In case of retail buyers of RS/DS. 9. 8.086 dated 27-06-05 seen in Annexure IV. (i) In case of IML and arrack manufacturers.086 Page 79 of 97 . 9. Buyers may note that confirmation in any other format or by an officer not authorised to issue such confirmation would not be entertained by the Corporation. ensure that they submit documents with at least three days validity.00 PM. 8. Circular No. Issue of Order for Supplies 9. no payment will be due to the seller and hence no sale consideration need be paid.00 noon would be entertained and the OFS issued on the same day. under normal circumstances. A portion of the challan with the confirmation of the bank shall be submitted to the head office of the Corporation. requests given before 12. 9. 9. Such request shall be accompanied by instructions to the bank in the prescribed challan. which may be collected at 4. The following documents shall be submitted by the RS buyer to the depot for obtaining delivery. in case of bulk buyers of RS/DS shall place an Order for Supplies (OFS) to the supplier in accordance with allotment order of Excise Commissioner and will be transmitted electronically to KSBCL depot located at the distillery. Buyers may. a copy of the spirit allotment order of the Excise Commissioner and copies of relevant parts of the transport permit.08 In case of the same legal entity (as in the case of manufacture of IML by another unit of the manufacturer) the margin amount. 9.01 The head office of the Corporation.02 An authorisation for issue of permit (AFIP) shall be issued to the bulk buyer of RS/DS to facilitate obtaining a transport permit for the transportation of RS/DS. Circular No.04 Every OFS issued by the Corporation shall have a validity period within which the buyer shall take delivery of RS/DS.00 noon would be considered subsequently and the OFS issued at 11.

In case of transport under bond. if it finds that the tanker is unfit for transportation of spirit. (ii) (iii) (iv) Circular No. 10. they may inform the head office/concerned depot for cancellation of the OFS.00 PM shall be avoided.06 The buyer shall strictly ensure that the containers/tankers deployed by them for taking delivery of the consignment are totally clean and are free from any contamination. Any tampering/misuse enroute shall attract action under the Karnataka Excise Act. copies of Part-II of Form RS (8). A bulk buyer shall thereafter submit copy of Part II of Form DL 18. All transit risks would be borne by the buyer. copy of Part IV of the transport permit in Form DL 23. The buyer shall provide reasonable facility to the transit security personnel of the Corporation who may accompany the consignment.09 The buyer shall be responsible for transporting the delivered spirit to its premises of use.086 Page 80 of 97 . The retail buyer shall also submit the above documents for obtaining delivery. dispatch of tankers in advance. Such permit shall be applied by the buyer under rule 16 (2) of the DS rules. Buyers may therefore refrain from insisting upon giving delivery immediately after issue of OFS. Delivery beyond 4. delivery of RS/DS is normally possible only after a lapse of one day from the date of issue of OFS. 10.05 Since the Corporation has to arrange for personnel to accompany the tanker.00 PM shall be only under exceptional circumstances. copy of Part II of the transport permit.Karnataka State Beverages Corporation Ltd. 1000 as penalty. copy of Part-II of the requisition in Form RS (3) . No claim for damages shall be entertained after the handing over.03 A buyer of DS shall apply for grant of transport permit from the distillery to the destination.04 Buyers may note that failure to obtain delivery within the validity period of the OFS may result in a levy of Rs. 1962. which keep waiting outside the distillery premises and demanding delivery immediately after issue of OFS. If for some reason buyers are unable to take delivery within the validity period of the OFS. 10. well after 4. 10. Buyers are therefore advised to verify the goods before accepting delivery. Circular No.086 dated 27-06-05 In case of other bulk buyers. In case of retail buyers. who shall be responsible to ensure that the consignment is not tampered with or misused. 10.07 Ownership of RS/DS delivered to buyers shall pass on to them immediately after delivery at the depot. 10. 10. copy of Part-II of the transport permit and copy of Part-II of the requisition in Form RS (3). More particularly. 10. The Corporation would refuse delivery.08 The buyer of DS shall collect the second copy of the invoice raised by the manufacturer for availing CENVAT benefit.02 The depot shall verify that the documents submitted are in order and arrange for delivery.

01 The depot manager shall provide a provisional extract of the ledger balance of the buyer as and when so requested which however. 11.10 The Corporation shall be at liberty to secure the container transporting the spirit with one-time locks (OTLs). The third sample shall be tested by the buyer and a certificate as in Annexure-V given immediately.per day per fleet of tankers escorted by the security personnel provided by the Corporation.086 Page 81 of 97 .02 The buyer shall. at present. Buyers are therefore advised to satisfy themselves about the quality and strength of the RS/DS delivered.01 The Corporation is a canalising agency and is not responsible for the quality of RS/DS delivered through it. the excise official if present and the escort personnel and handed over to the escort personnel. Quality 11. Thus the Sale Price shall be the same as the Landed Cost.11 The buyer shall promptly arrange for unloading of the consignment on the day of receipt if it reaches during working hours. signed by the representative of the buyer. 13. beyond the permissible limit. No claim for damages due to any deficiency in quality shall lie against the Corporation.02 The Corporation is entitled to recover differences due to short billing immediately after such instances are noticed by it. immediately after the consignment is received at the destination. mixed and filled to bottles. 13. shall levy a penalty of Rs. draw three samples of 375 ml each of the received item by drawing samples from all the sub-tanks of the tanker. In the event of any delay. 12. the consignment shall be unloaded on the next working day. 11. Accordingly.086 dated 27-06-05 10. the identification label provided by the Corporation affixed. Such amounts if not paid within seven days of Circular No. is subject to final confirmation by the head office. Two of the samples shall be sealed.1000/. Margin 12. Generally. Upon receipt of the consignment in its premises of the buyer. If not. The buyer may seek clarifications in the sales invoices raised by the Corporation within four weeks of the sale. Circular No. at its sole discretion. Accounts 13. 10. he shall certify that the same was received intact.Karnataka State Beverages Corporation Ltd. the Corporation would not entertain clarifications on the sales invoices raised after four weeks of the sale. Corrective action as may be necessary would be taken based on the buyer’s representation.01 There shall be no margin on the Landed Cost. the buyer shall ensure that the tankers deployed by them shall have adequate facility for securing with seals/OTLs and that the secured container or the security locks/seals/OTLs are not tampered with. A copy of the excise verification certificate shall also be handed over. the Corporation.

Karnataka State Beverages Corporation Ltd.

Circular No.086 dated 27-06-05

raising the demand shall attract interest at 14 percent per annum. Further, the Corporation is at liberty to adjust such amounts out of any other credit lying in favour of the buyer and suspend sales to the buyer defaulting in paying the difference amount. 14. Jurisdiction

14.01 Any sale made by the Corporation shall be subject to the exclusive jurisdiction of Bangalore city civil court only, irrespective of where the cause of action or part of it arises. 15. Review of the policy

15.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all buyers.

(R. Ramaseshan) Managing Director

To i) ii) iii) iv) v) vi) vii) viii) All Primary & Composite Distilleries All Manufacturers /Suppliers & Buyers ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File

Circular No.086

Page 82 of 97

Karnataka State Beverages Corporation Ltd.

Circular No.086 dated 27-06-05

Annexure I Details of the organisation of the buyer (To be given in the letter head of the organisation)

Name of the organisation: Type of the organisation: Documents enclosed

Company/Partnership/Sole Proprietorship

Certificate of incorporation/Partnership deed and registration from the registrar of firms Particulars of the Chief Name Address Telephone Fax Executive/Managing number number Partner/Owner Particulars of the other Name Address Telephone Fax Directors/ Partners number number (1) (2) (3) (4) (5) Address for correspondence E mail id Bank particulars a) Name of the bank b) Branch c) Account number

Place: Date:

Sd/Chief Executive/Managing Partner/Owner (Name)

Circular No.086

Page 83 of 97

Karnataka State Beverages Corporation Ltd.

Circular No.086 dated 27-06-05

Annexure II

Details of authorised signatories to deal with the Corporation on behalf of the buyer (To be given in the letter head of the organisation)

Name of the signatory Designation Address Telephone number Mobile number E mail id Specimen signature

(1) (2)

(1) (2)

Place: Date:

Sd/Chief Executive/Managing Partner/Owner (Name)

Circular No.086

Page 84 of 97

Circular No. the Corporation shall not be liable and shall be kept indemnified by the seller at all times against any claims for losses/damages due to nondelivery of spirit by the seller or default in payment of contracted price by the buyer.Karnataka State Beverages Corporation Ltd. Circular No. 3) More specifically.086 Page 85 of 97 . the distributor licensee under the Karnataka Excise Act and Rules made thereunder.086 dated 27-06-05 Annexure III Clauses to be incorporated in the agreement between the buyer and the manufacturer selected through a tender/negotiation process 1) The parties hereby agree that the seller shall issue and the buyer shall purchase rectified spirit/denatured spirit as the case may be only through the Karnataka State Beverages Corporation Limited. 2) The seller shall be liable for any consequences arising out of non-compliance of such conditions/commitments of the contract and he shall keep the Corporation full indemnified for any consequences that would arise due to breach of contract by either of the parties.

086 dated 27-06-05 Annexure IV Account numbers of the Corporation for credit of amounts by bulk buyers Sl.H. Road. J. Road. Shanthinagar Bangalore-560027 5 UTI Bank M. Shanthinagar Bangalore-560027 3 IDBI Bank Sarakki Branch.No. Nagar Bangalore-560078 4 ING Vysya Bank Limited K.P.086 Page 86 of 97 . Circular No.H. Road Bangalore-560001 Circular No.G.Karnataka State Beverages Corporation Ltd. Name of the bank 1 Canara Bank Name of the branch Avenue Road Branch Bangalore – 560 002 2 Corporation Bank K.

Karnataka State Beverages Corporation Ltd. if any KSBCL sale invoice number Type of spirit Quantity received Temperature of the received spirit Strength of spirit (in 0 OP) Specific gravity of spirit Tare weight of the vehicle (in kgs) Gross weight of the vehicle (in kgs) Weight of the spirit delivered (in kgs) Place: Date: Sd/(Authorised signatory) (Name) Circular No.086 dated 27-06-05 Annexure V Certification of RS/DS delivered (To be given in the letter head of the buyer) Date and time of receipt Date and time of unloading Vehicle number Serial number of the security seals in the vehicle Details of security seals tampered/missing. Circular No.086 Page 87 of 97 .

7. Request for import 2. 3. the procedure prescribed in the sourcing and sales policies for RS and DS would be followed. If any procedure is not explicitly mentioned herein. 3. 1.Karnataka State Beverages Corporation Ltd. Buyers eligible to import Only bulk buyers of RS/DS would be eligible to import RS/DS.087 June 27.087 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No. Circular No. The distillery from where the import is proposed along with a consent letter of the supplier and details of selling price in the format in Annexure I.02 The validity of the OFS issued shall be in accordance with the import permit issued and the supplier shall deliver RS/DS within the validity period. 2005 Import policy for rectified spirit and denatured spirit for 2005-06 A detailed procedure for sourcing of rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time. Circular No. This circular supercedes all previous procedures.01 2. the Corporation would issue a demand draft in favour of the supplier for the value of RS/DS proposed to be imported.01 A bulk buyer of RS/DS shall submit the following documents to the head office of the Corporation.03 If the terms of payment so require. 1. (i) (ii) (iii) A No Objection Certificate and/or Import permit from the Excise Commissioner allowing import.087 Page 88 of 97 .2005. Suppliers and buyers are requested to take note of the procedure prescribed in this circular which would come into effect from 1. Issue of Order for Supplies 3. A demand draft payable in Bangalore for the sale consideration or the confirmation portion of the prescribed challan for having remitted the amount. 3. so far as it pertains to import of rectified spirit and denatured spirit.01 The Corporation would issue an Order for Supplies (OFS) to the supplier from whom the buyer wishes to import RS/DS. Details of the OFS issued shall be given to the buyer.

7. details as per Annexure-III. Circular No. within one hour of receipt of goods. Upon the consignment reaching its destination. the Corporation would take delivery and immediately hand over the same to the buyer.087 dated 27-06-05 3. (R. A letter of indemnity in the form as per Annexure-IV shall be submitted.087 Page 89 of 97 . Delivery 4. the Corporation may.01 All transactions of the Corporation with the Manufacturer shall be subject to the exclusive jurisdiction of Bangalore. Ramaseshan) Managing Director To i) ii) iii) iv) v) vi) vii) viii) All Primary & Composite Distilleries All Manufacturers/Suppliers & Suppliers ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File Circular No. If the circumstances so warrant. All transit risks shall therefore be borne by the importer. details as per Annexure-II. The buyer shall promptly fax.Karnataka State Beverages Corporation Ltd. at its sole discretion amend this policy and the same shall be binding on all buyers. No claim in this regard shall lie against the Corporation. 6.01 The importer shall take delivery of the consignment as an agent of the Corporation and transport the same.02 Buyers may note that the Corporation does not guarantee delivery. Jurisdiction 6. the user shall keep the Corporation indemnified at all times in this regard. 4. 4. within one hour of dispatch of goods. Further. Review of the policy 7.01 The above policy is subject to periodic review. and the user shall bear all risks arising due to any delay/default in delivery by the supplier.04 The supplier shall promptly fax.

087 Page 90 of 97 . Circular No.087 dated 27-06-05 Annexure I Selling price of Spirit by the manufacturer/exporter on ex-distillery basis (To be submitted on the letterhead of the manufacturer/exporter) Type of Spirit Quantity of Spirit : : Particulars (i) Basic declared price of the manufacturer (ii) Duties and other taxes as applicable (iii) Selling price to KSBCL [(i)+(ii)] Price in Rs.Karnataka State Beverages Corporation Ltd. per litre Terms and Conditions : (Please specify) Place: Date: Sd/Authorised signatory (Name) Circular No.

Yours faithfully Authorised Signatory (Name & address of the manufacturer) Circular No. Serial No.2248 3645) Ref:No: Date: To The General Manager Karnataka State Beverages Corporation Limited Seethalaxmi Tower # 78. & date__________________. Amount Rs_________ Type of spirit Total Quantity delivered_______________BLs.Qty________BLs. Dear Sir Sub: Information regarding dispatch of export consignment With reference to the above. Thanking you.087 Page 91 of 97 .087 dated 27-06-05 Annexure II (To be furnished on Co’s Letterhead of the manufacturer within ONE hour from the time of dispatch of each consignment by fax to KSBCL FAX No. No. of the security seals in the vehicle Temperature of the spirit delivered Strength of spirit (in 0 OP) Tare weight of the vehicle (in kgs) Gross weight of the vehicle (in kgs) Weight of the spirit delivered (in kgs) We have handed over all the relevant documents and samples along with Annexure-X of the Sourcing Policy of RS/DS in respect of above consignment to security guard deployed by the KSBCL for supervising the shipment of consignment.Qty________BLs. Circular No. Mission Road BANGALORE 560 027. Amount Rs_________ Supplier Inv. & date__________________. we have dispatched the consignment as per the details furnished below: Date & time of dispatch Vehicle Registration number KSBCL OFS No.Karnataka State Beverages Corporation Ltd.

& date__________________. Amount___________ Supplier Inv.087 Page 92 of 97 . & date__________________. of the security seals in the vehicle Details of security seals tampered/missing. No. Thanking you.Qty________BLs. Dear Sir Sub: Information regarding receipt of import consignment With reference to the above.087 dated 27-06-05 Annexure III (To be furnished on Co’s Letterhead within ONE hour from the time of receipt of the import consignment by fax to KSBCL FAX No.Qty________BLs. Serial No. Amount___________ Type of spirit Quantity received_______________BLs.2248 3645) Ref:No: Date: To The General Manager Karnataka State Beverages Corporation Limited Seethalaxmi Tower # 78. Mission Road BANGALORE 560 027.Karnataka State Beverages Corporation Ltd. Yours faithfully Authorised Signatory (Name & address of the buyer) Circular No. if any. we are in receipt of import consignment from M/s_________________________________________as per the details furnished below: Date & time of receipt Vehicle number KSBCL OFS No. Circular No. We shall forward all the documents along with EVC in respect of above consignment within______________.

Government of Karnataka. Sub: Letter of indemnity Under NOC No.4.2005. We further undertake to pay all the losses. Yours faithfully._______________________________________ to __________________________ ______________________________. we are importing ____________ bulk liters of ____________ Spirit from M/s. Circular No. costs.6. we hereby agree to indemnify and keep the Corporation indemnified from any and all claims that may arise in respect of importation of _____________ Spirit by us from the above party. Bangalore. for (Name of the company) Circular No.87 dated 21. KSBCL.___________________________________. Thanking you. As per Clause No.Karnataka State Beverages Corporation Ltd.087 Page 93 of 97 .02 of your Circular No._________________________________ dated ______________ issued by the Excise Commissioner. Dear Sir. damages.087 dated 27-06-05 Annexure IV FORMAT OF LETTER OF INDEMNITY [To be typed on the letterhead of the company (buyer)] To: The General Manager (Operations). We shall make arrangements for transportation and insurance in respect of the above consignment at our cost and risk. We have been appointed as agent for transporting the above consignment from M/s. charges and expenses which the Corporation may suffer and keep the Corporation indemnified in all other respect on account thereof.

0 The schedule of shipment from the custom bonded warehouse to the importer’s premises shall have to be declared at least one week in advance to enable the Corporation to deploy security personnel for supervising transit of goods. 7.088 June 27. 2. 4. 3. (iii) Duly filled Annexure. 1967. duly obtaining a NOC from the Excise Commissioner of Karnataka. The importer shall approach the respective Deputy Commissioner (Excise) for issue of import permit by paying necessary fees as per Karnataka Excise (Excise Duty and Fees) Rules.088 Page 94 of 97 .0 Manufacturers shall complete all excise formalities for import of spirits. Copies of import permits Copies of export permits/transit pass issued by the concerned state excise authorities.0 The importer shall arrange transportation and insurance of the shipment of the consignment from the custom bonded warehouse to the destination at his cost and risk. 5. Upon arrival of the goods at the custom bonded warehouse. 6.0 The following procedure has been formulated to facilitate manufacturers to import directly certain variety of spirits for captive use from abroad. (i) (ii) Circular No.0 The Corporation would issue a suitable letter of authorisation for issue of an import permit.Karnataka State Beverages Corporation Ltd. (i) NOC issued from the Excise Commissioner of Karnataka (ii) Copy of Bill of Entry (iii) Letter of Indemnity. the importer shall approach the Corporation with the following documents. 2005 Policy on import of spirit from abroad (Potable/Non-Potable) for 2005-06 1.088 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No. Circular No.0 Copy of the Excise Verification Certificate.0 The importer after receiving the consignment at the destination shall issue the following documents to the security personnel deployed by the Corporation who has accompanied the shipment. after completion of all formalities shall be sent to the Head Office directly.

088 dated 27-06-05 8. If any procedure is not explicitly mentioned. The above shall come into effect from 01.Karnataka State Beverages Corporation Ltd.0 The procedure specified above would supplement the procedure stipulated in sourcing and sales policies already issued by the Corporation. the procedure prescribed in the sourcing and sales policies would prevail.2005. (R. Ramaseshan) Managing Director To i) ii) iii) iv) v) vi) vii) viii) All Primary & Composite Distilleries All Manufacturers & Suppliers ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File Circular No.07. Circular No.088 Page 95 of 97 .

01 The Corporation would not participate in any solicitations for supply of spirit to buyers outside the state (either within the country or outside). The No Objection Certificate issued by the Excise Commissioner of the state to which the spirit is to be imported. then it shall be specific to it. the procedure prescribed in the sourcing and sales policies for RS and DS would be followed. 1. so far as it pertains to export of rectified spirit and denatured spirit. Quantity proposed to be imported.7.2005.089 June 27. Circular No.01 (i) (ii) (iii) (iv) Request to the Corporation by buyers The following documents shall be submitted to the head office of the Corporation. Circular No. If any procedure is not explicitly mentioned herein. 3. the Corporation would not be liable for any contractual obligation that may devolve upon the manufacturer. clearly indicating that the spirit would be issued only through the Corporation. If a manufacturer obtains an order for such supply.02 Manufacturers may also export spirit to walk-in outside buyers with whom there is no obligation for regular supply. Export price 2. Manufacturers may respond to such solicitations. In such cases. 2.089 dated 27-06-05 KARNATAKA STATE BEVERAGES CORPORATION LIMITED Circular No. They may also export spirit to their units (which may be under the same legal entity) in other states. 1. 1. refuse to export spirit.Karnataka State Beverages Corporation Ltd. Suppliers and buyers are requested to take note of the procedure prescribed in this circular which would come into effect from 1. Export of spirit 1. Allotment order of the Excise Commissioner in Karnataka.01 The Basic Declared Price including export fee as applicable for bulk delivery indicated by the manufacturer or the forward contract rate as applicable shall be the price at which export of spirit would be undertaken. 3. if it deems it necessary.03 The Corporation may. 2005 Export policy for rectified spirit and denatured spirit for 2005-06 A detailed procedure for sale of rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time.089 Page 96 of 97 . notwithstanding the commitment made by the supplier. This circular supercedes all previous procedures. Copies of the import permit issued by the competent authority.

5.01 The Corporation would place an Order for Supplies (OFS) to the manufacturer from whom the supply is preferred.089 dated 27-06-05 A demand draft payable in Bangalore for the sale consideration or the confirmation portion of the prescribed challan for having remitted the amount. 4. Issue of Order for Supplies 4. at its sole discretion amend this policy and the same shall be binding on all suppliers. 4. Review of the policy 7. (R.01 The above policy is subject to periodic review. If the circumstances so warrant. (v) Circular No. apply for an export permit for the transport of the consignment to the destination.01 All transactions of the Corporation with the Manufacturer shall be subject to the exclusive jurisdiction of Bangalore.02 The Corporation would also issue an authorisation for export (AFE) to the manufacturer to facilitate obtaining of export permit for the transportation of RS/DS. A copy of the same shall be produced to the depot concerned to facilitate delivery. 7.089 Page 97 of 97 . 6. shall be in accordance with the No Objection Certificate/Import Permit issued by the importing state. based on the AFE. Jurisdiction 6.Karnataka State Beverages Corporation Ltd. etc. Delivery 5.01 Manufacturers shall. the Corporation may. quantity for export. The validity of the OFS.. Ramaseshan) Managing Director To i) ii) iii) iv) v) vi) vii) viii) All Primary & Composite Distilleries All Manufacturers & Suppliers ED-1 / ED-2 GM(S)/GM(N)/C(F)/A(F&A)/C(A) AGM(F)/AGM(LS)/MMIS All IML Depot Managers All Spirit Depot Managers Circular – Master File Circular No.

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