The Authentication Times, Issue 37

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The Authentication Times | Issue 37
The Authentication TimesThe official newsletter of Authentication Solution Providers’ Association (ASPA)
November 2019 | Volume 13 | Issue 37
Tax stamps
role in implementing
ideal state excise policy

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The Authentication Times | Issue37

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Editor’s Corner
Dear Readers,
Welcome to the latest issue of “The Authentication Times”.
Illicit liquor trade poses a serious threat to government, socially
as well economically. Excise duty which is an important source
of revenue is continually under threat from the practice of illicit
trade. Considerable amount of money which could be used to
benefit the government services of a country are being diverted
to the pockets of criminals participating in illegal trading. In
addition, the illicit trade in liquor poses a serious threat to
consumer health.
To counteract it, some State governments have implemented
Tax Stamps as part of their anti-counterfeiting strategy. This
has not only minimized the hooch tragedies and duplication but
has also substantially increased the excise revenue collection in
States.
This issue brings our cover story on “TAX STAMPS
ROLE IN IMPLEMENTING IDEAL STATE EXCISE
POLICY”. Apart from this, the issue also covers interviews,
industry updates & news.
We hope you will find this issue informative and interesting and
as always, we look forward to receiving your feedback.
If you have any news, contributions or comments for the
editorial team, please feel free to email us at info@aspaglobal.
com
In This Issue
Published by : Authentication Solution Providers’ Association (ASPA)
Issue Editor : CS Jeena
Printed by : Eyedea Advertising, New Delhi
The Authentication Times is a quarterly newsletter published by ASPA with an aim to provide latest developments, research,
articles, patents and industry news to a wide audience related to Authentication in India and World.
The editorial team welcomes your news, contributions and comments. Please send you product updates, press releases,
conerence announcements or other contributions to ASPA:
21-Ground Floor, Devika Tower 6, Nehru Place, New Delhi 110019, India
Telefax: +91 (11) 41617369 | E-mail: info@aspaglobal.com | Website: www.aspaglobal.com
Disclaimer:
ASPA in no way endorses the illegal usage of liquor, tobacco, marijuana or other narcotics. The content published is intended for informational purposes
only and is not meant to propagate the use of any illegal substance.
Chander S Jeena
Editor
The Authentication Times
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Tax stamps role in
implementing ideal state
excise policy
Uganda takes a stand for
effective alcohol regulation
India needs a
comprehensive national
policy to tackle alcohol and
other forms of additives
Interview with
Sean Worthington, Raidatech
Innovation in Authentication
ASPA & Member News
Center to Allow Scientific
Research on Cannabis

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Tax stamps role in
implementing ideal
state excise policy
Enhance revenue, reduce consumption, curbing illicit liquor trade and consumer
empowerment & engagement in authentication
Introduction:
Excise taxes on alcohol & other sin products have long
been a dependable and significant revenue source for
Policy planners in India. Maximization of Government
Revenue to generate resources that can be utilized to
finance Departmental projects is always accorded a high
priority on the agenda of the policymakers. However,
when it comes to framing a policy such as Excise Policy,
the Excise & Taxation Department has to give due
weight to the health and well-being of the citizens of
the State. An ideal Excise Policy, therefore, not only has
to strike a delicate balance between the twin objectives
of preventing dominance of liquor mafia or social
degeneration on the one hand and securing an optimum
revenue for the Government on the other, but also has
to address the concerns of all the four key stakeholders
i.e. the Government, the Manufacturers, the Licensees
and most important of all, the Consumer. While there are
various other factors that also play a significant role in
achieving the State Excise Objective, the article explores
the role of Tax Stamps & Traceability Technology Role
in State Excise Policy in the current scenario.
a) Importance for Excise Revenue for
State; post-GST implementation in India:
Excise revenue from alcoholic beverages has always
been an important source of own tax revenue for states
in India. Post GST implementation, its significance has
increased as revenue from state excise (from alcoholic
beverages) and stamp duty and registration fees (mainly
levied on sale of property) are now the major sources
where state governments have autonomy to levy taxes. If
one were to exclude SGST (rates of which are decided in
the GST Council) from states’ own revenues, the share
of state excise and stamps and registration fees in states’
own revenues has increased significantly, from around
20% to 40%, in the post-GST regime (see graph).
According to Bloomberg thinktank, If all
countries increased their excise taxes to
raise prices on tobacco, alcohol, and sugary
beverages by 50 percent, over 50 million
premature deaths could be averted worldwide
over the next 50 years while raising over US
$20 trillion of additional revenues in present
discounted value. Raising taxes and prices
further in future years would save additional
lives and raise even more revenues
Leading Story

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b) Reduce Alcohol consumption – Socio-
economic issues:
Maximization of Government Revenue to generate
resources that can be utilized to finance Departmental
projects is always accorded a high priority on the agenda
of the policymakers. However, when it comes to framing
a policy such as Excise Policy, the Excise & Taxation
Department must give due weight to the health and
well-being of the citizens of the State. According to the
World Health Organization (WHO), harmful alcohol
consumption resulted in more than 3 million deaths in
2016, and most of these deaths occur in low and middle-
income countries. Reducing the harmful use of Alcohol
is amongst United Nations Sustainable Developments
Goals to achieve by the year 2030.
The key challenge is to create a fine balance between
optimization of revenue while giving proper weight
to social consideration and ramifications. Worldwide
experts recommended increases taxes for SIN products
as one important element to reduce consumption as
well as to enhance revenue. Nevertheless, Policymakers
face strong opposition to raising taxes on alcohol and
other sin products from producers and their allies who
persistently raise concerns about the impact of tax
increases on revenues, employment, illicit trade, and
the poor. However, evidence from around the world
demonstrates that these arguments are either false or
greatly exaggerated and none justify inaction. Taxes and
prices can have a major impact on curbing this illegal
trade but need to be supported by strong governance
and high-level security.
c) Illicit trade as a major obstacle in
achieving State Excise Objectives:
While the intention of higher taxes is to reduce
consumption, this rarely occurs at the ground level.
On the contrary, consumption either remains the
same, or consumers turn to neighboring states for their
consumption or they turn to smuggled or counterfeit
products. In India, as the liquor comes under State Excise
Policy, the lack of technological tools for identification,
monitoring of supply chain, different pricing policy and
lack of co-ordination between enforcement authorities
create chances for counterfeiters to benefits from
pilferage in systems.
d) Is Prohibition is the answer to curb illicit
liquor trade?
Prohibition is not the only answer. Many times,
prohibition leads to increased illicit liquor business.
For example, Liquor is prohibited in Gujarat, however,
according to a recent study 38% of youth in Gujarat
consume alcohol. Other than this, 12% of people are
consuming other forms of drugs such as cannabis. In
the last two years, police had seized liquor valued Rs
254 crore. The Government had confirmed that due
to prohibition there is an increase in smuggling from
a neighboring state. In the last two years, a total case
reported 132415 country liquor, 29989 IMFL liquor.
The step has increases the consumption of illicit
liquor and loss of revenue. Now the state government
is demanding compensation cost from central as they
are losing Rs 15000 crore annually due to prohibition.
Similarly in other prohibited state Bihar, the sale of
Leading Story
Source: Hindustan Times

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other drugs products has increased
significantly. As per the latest report
from the Narcotics Control Bureau,
Bihar top the chart in consumption
of opium and hashish. In our
country, 16 crore people consume
alcohol whilst 3.1 crore people use
cannabis. Beyond prohibition, India
needs a comprehensive national
policy to tackle alcohol and other
forms of additives.
e) Tax Stamps in India &
their role in curbing illicit
trade, consumer protection,
and revenue enhancement,
recent developments and
key learnings:
TAX Stamps have always been an
important authentication solution
used by Government authorities
to curb the illicit trade, protect the
consumer and to increase the excise
revenue. Today across the globe,
81 countries are using cigarette and
alcohol tax stamps. In India, 22
States (including Union Territories)
are using approximately 22 billion tax
stamps per annum. The success of
tax stamps in India comes from their
dual role in supply chain monitoring
and visual authentication, for
both enforcement authorities and
consumers. However, this dual
role needs to be supported by
the appropriate organization and
regulation of the Indian liquor
trade. If we do not integrate both
digital and non-digital (physical and
sensory) authentication methods
into our approach, then we risk
wasting the major investments
that are about to be made in track
and trace. Of course, there are no
completely foolproof processes or
systems.
There, are, however, complexities
within these processes and systems
that can deter both professional and
not-so-professional counterfeiters.
There are always two primary
objectives involved: one is to
provide, safe, genuine products while
protecting the revenue stream of the
government, and second, of course,
is to be able to catch offenders.
Conclusion:
Tax Stamps beyond tax
collection tools:
Policymakers need to study the
importance of Tax Stamps in the
global context and apply such
solutions in all states in India. In
India, the Excise Department needs
to think about TAX Stamps as a
tool beyond tax collection tools.
The existence of cheaper, less-
sophisticated, less effective stamps
and marks potentially dilute the
value proposition around their
use as platforms to implement the
global guidelines. Instead of using
it is a mere product, they need to
reframe their work on their Tax
Stamp Program as an opportunity
for consumer & industry
empowerment. The new generation
Tax Stamps with technological
innovation in security printing,
serialized coding, data processing,
and mobile communications, can
be into sophisticated devices with
additional roles that related to
product authentication, supply chain
security & data intelligence. This
will ensure and help the State Excise
Department in building their policy
towards reducing consumption and
optimization of revenue.
Leading Story

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a) Tax revenue includes revenue from State own tax revenue plus share in central taxes
b) State’s own tax revenue includes revenue from taxes on income, property & capital and taxes on commodity
and services
Source: Reserve Bank of India study on State Finance Budget for period 2019-20
State Table 1: Budget estimates of States and Union Territories for period 2019-207
a) Tax revenue (Rs
Million)
b) State own tax
revenue (Rs Million)
c) State excise
revenue (Rs Million)
d) percentage of
excise revenue
in state own tax
revenue
Andhra Pradesh 1102711 754377 85180 11
Arunachal Pradesh 130111 14400 20,83 14
Assam 523683 179941 14500 8
Bihar 1229217 361746 0
Chhattisgarh 508470 236929 50000 21
Goa 90931 58456 4752 8
Gujarat 1178092 917615 1336 0
Haryana 623216 512660 70000 14
Himachal Pradesh 153194 79214 16253 21
Jammu & Kashmir 249773 103872 14000 13
Jharkhand 498500 237500 16000 7
Karnataka 1415502 1017439 209500 21
Kerala 885822 670999 29837 4
Madhya Pradesh 1290245 652737 130000 20
Maharashtra 2574549 2108242 174773 8
Manipur 63957 11845 87 1
Meghalaya 75121 20898 2898 14
Mizoram 44588 5736 50 1
Nagaland 49726 7801 51 1
Orissa 722065 329999 45000 14
Punjab 509936 376741 62010 16
Rajasthan 1182044 737425 105000 14
Sikkim 39547 9852 2370 24
Tamilnadu 1587915 1248130 72623 6
Telangana 890471 693285 109010 16
Tripura 87049 27489 2310 8
Uttrakhand 236221 147368 30475 21
Uttar Pradesh 2930391 1442491 315174 22
West Bengal 1279424 672072 118736 18
Delhi NCR (UT) 425000 425000 60000 14
Puducherry (UT) 30980 30980 11000 36
Leading Story

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Uganda takes a stand for
effective alcohol regulation
In a long-overdue move, Ugandan
authorities have approved the
National Alcohol Control Policy
in a bid to curb alcohol abuse
nationwide. With Ugandans among
the highest consumers of alcohol
in Africa— more than one-fifth of
the population engages in binge
drinking—and the alcohol industry
pushing back against effective
regulation at every turn, such a public
health crackdown by Kampala will
be no small undertaking.
Untilnow,Uganda hashad no written
alcohol policy and still has scarce
regulation of alcohol availability and
advertising. Kampala’s newly minted
Alcohol Control policy addresses
several key issues: intoxication,
public safety, health impacts, the
availability of alcohol, digital tax
stamp, and research into alcohol
abuse.
“The policy was approved with the
main objective of raising community
awareness about the degree and
determinants of the health, social,
and economic problems associated
with harmful use of alcohol,”
remarked Suubi Kiwanuka, an
official at the Uganda Medical Centre
in Kampala.
Dangerous sachets on the
way out -
Recent efforts have targeted the
sale of alcohol in individual sachets,
including small plastic packets of
spirits as potent as 45% proof. Often
costing as little as 13 US cents, the
sachets are favored by low-income
earners— and schoolchildren.
“Because this alcohol is affordable,
people carry it in their bags, their
geometry sets, in their pockets,”
explained Amelia Kyambadde,
Uganda’s Minister of Trade and Co-
operatives. “Its consumption rate
has been very high.”
The health risks posed by these
pocket-sized sachets are substantial.
Multiple studies have found that
spirit sachets consistently contain
more than just alcohol; carcinogens
such as ethanol, arsenic, chromium,
and lead are often part of the
package. With close to one-third of
Ugandans beginning to consume
alcohol before their 14th birthday,
ridding the market of these sachets
is a critical first step in Kampala’s
efforts to ensure a healthier
population.
Cracking down on illicit
tipples – Digital Tax
Stamps
A multi-sectoral task force launched
by Kyambadde will be enforcing
the ban, including officials from the
ministries of health, internal affairs,
finance, trade, education, and local
government. Also involved in the
Uganda Revenue Authority (URA),
which is currently deploying its own
campaign to combat the sale of illicit
and contraband beverages.Parallel to
Uganda’s newly-codified national
alcohol policy and the ban on
alcohol sachets is the installation of
a new system that has proven highly
successful in neighboring Kenya: the
introduction of digital tax stamps,
allowing consumers and retailers
alike to verify that certain products
are genuine—and that tax has been
paid on them.
The tax stamp system targets both
heavily regulated products, such as
beer, spirits, wines, and tobacco, as
well as common consumer goods
like mineral water and soda. In
addition to protecting consumers
from fake products and curbing
tax evasion from under-the-table
sales, the URA says the new digital
system will also improve the import
process. In Kenya, the same system
has reduced the number of days
for clearing customs from 28 days
to four.Uganda’s similar tax stamp
system is going to start this week.
Backlash from covert
interests -
Despite opposition from
manufacturers and distributors
worried about their bottom lines,
Uganda’s Revenue Authority is,
fortunately, determined to push
ahead regardless. It has good reason
to be optimistic: through their own
initiative, the Kenyan Revenue
Authority was able to seize more
than 350,000 illicit cigarettes packs,
secured a 100 percent prosecutorial
success rate in over 400 cases, and
increase excise revenue collections
by more than half.
Higher compliance with taxes on
consumer goods, then, is likely
to dissuade the abuse of harmful
substances through higher price tags
while removing illicit goods from the
market. At the same time, plugging
national tax leaks will pad Kampala’s
coffers, a sure windfall for future
public health initiatives. It’s a sign
that Uganda is on track to reap both
financial and community benefits
from these new controls.
Source: https://eastafricamonitor.com
Country Initiative

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UAE’s FTA to begin second phase of tobacco
markings
UAE’s Federal Tax Authority
(FTA) intends to begin the second
leg of its ‘Marking Tobacco and
Tobacco Products Scheme’ from 1st
November.
The import of water pipe tobacco
and electrically heated cigarette plugs
that do not have digital tax stamps
will be banned from March next
year, a statement said.
The first phase of the scheme, which
started in August this year, banned
all type of cigarettes in local markets
that didn’t bear the digital tax stamps.
The initiative is primarily to protect
customers from low quality products
and fraud, as well as to curb tax
evasion.
“Starting November 1, 2019, all
producers and importers of all
kinds of water pipe tobacco, and
electronically heated cigarette plugs
can place their orders for Digital Tax
Stamps from the system’s supplier
after FTA approval and then placing
them on the packaging of their
products before they are supplied
on the market and ensure excise tax
has been paid in all UAE,” said H.E.
Khalid Ali Al Bustani, FTA director
general.
The entire value chain (manufacturer
to consumer) of all marked and
approved products is electronically
monitored to ensure all excise taxes
due on tobacco and related products
are paid, the statement said.
Manufacturers and suppliers can
download the application form from
the FTA website to order digital tax
stamps.
“Starting from March 1, 2020,
importing any type of water pipe
tobacco and electronically heated
cigarette plugs into the UAE without
the Digital Tax Stamps will be strictly
prohibited,” H.E. said.
“Following that, another ban will
come into effect on June 1, 2020,
this time affecting any supply,
transfer, stockpiling, or circulating
of unmarked waterpipe tobacco and
electronically heated cigarette plugs
in UAE markets.”
Source: https://gulfbusiness.com/
News
The Kenya Revenue Authority
(KRA) announced the deadline of
November 13 to enforce excise
stamps be affixed on bottled water,
juices, soda and other non-alcoholic
beverages as well as cosmetics, failure
to which goods will be seized and
offenders prosecuted.
The roll-out of the Excisable Goods
Management System (EGMS) was
initially set for September 1 but
was delayed after consultation with
manufacturers. The new system will
see manufacturers required to install
blowers that dry bottle caps before
they are coded. In addition, they will
build server rooms, lay fibre optic
cables and install a software that
would then make them compliant.
“KRA informs all licensed
manufacturers, importers,
distributors, retailers and general
public that further to the Public
notice dated 30 August 2019 bottled
water, juices, energy drinks, soda
and other non-alcoholic beverages
manufactured in or imported into
Kenya from 13 November, 2019
must be affixed with an Excise
Stamp,” said KRA Commissioner-
General James Githii Mburu in a
notice.
“All bottled water, juices, energy
drinks, soda and other non-alcoholic
beverages manufactured or imported
into Kenya before the go live date
will be allowed in the market without
stamps until January31, 2020,” he
said. The authority is looking to
raise an additional Sh3.6 billion from
excise tax.
Kenya Revenue Authority (KRA) enforce
the stamps to raise an additional Sh3.6
billion from excise tax.
Nanotech Security Corp. announces
the launch of its KolourDepth™
banknote security feature. The
depicted private note features a new
currency authentication product
called KolourDepth that involves 3D,
color, and movement. In addition
to striking overt security effects like
multiple 3D elements, multiple color
images, Omni-directional movement,
and overprinting, KolourDepth can
enhance a feature by also adding
microtext, nanotext, nano-imagery,
and machine readability. KolourDepth
is based on Nanotech KolourOptik®
nanographic display platform which is
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all our leading-edge nanotechnology
products.
Nanotech launch
new security feature
KolourDepth™

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The Authentication Times | Issue37News
Tea Board has floated EOI to bid for leveraging
blockchain in tea’s supply chain
It expects the technology to capture
the entire supply chain for tea In
India, tea is usually adulterated by
mixing colored powder to it.
The Tea Board India is planning
to use blockchain to implement
the complete traceability of tea
produced and supplied in the
country. The board wants to track
the tea production starting from
the plantation stage to the time
a buyer buys it. The Tea Board
believes that blockchain will help
identify and eliminate points of
adulteration of tea, preserving the
identity of Indian tea, and helping
tea farmers get a fair price of the
products. The board also believes it
could increase the consumption of
tea in the domestic market.
While releasing a tender, the
Tea Board has put forward an
expression of interest (EOI)
inviting companies to bid for
designing, developing and
commissioning end-to-end
technology to ensure traceability
of the entire value chain of the
tea trade. Reportedly, the company
or startup selected through the
bidding process is expected to
study and implement available
technologies such as blockchain to
integrate various online systems for
ensuring the traceability of the tea.
Daimler India cracks down
on unauthorized use of its
BharatBenz brand name
BharatBenz, commercial vehicle
brand of Daimler AG, has cracked
down on unauthorized use of its
brand name and spare parts.
Daimler India Commercial Vehicles,
which owns the brand BharatBenz,
said that it prosecuted Pyken
Industries for manufacturing and
selling spare parts bearing the mark
BHARATBENZ and operating an
unauthorized domain under the
BharatBenz brand name, thereby
damaging the brand’s reputation.
The Delhi High Court passed an ex
parte interim order against Pyken
Industries, allowing a raid to be
conducted by the court-appointed
commissioner at two locations --
Pyken Industries Pvt Ltd Ghaziabad
and BSI Sales India, Delhi.
Several products were seized
including Torque rod bushes, V
rod bushes, King Pin Bearings and
Oil Seals to name a few, said the
company.
Without disclosing the value,
Satyakam Arya, Managing Director,
and CEO, DICV, said, “It is not just
about monetary damages, which
may be negligible or substantial. It is
about fighting back for the customer.
It is about creating awareness and
ensuring safety. We take brand
protection seriously and this legal
action shows how vigorously we will
always work to protect our customers
and our brand reputation.”
The use of non-genuine parts
damages a brand’s reputation since
it potentially impacts the efficiency
of the vehicle and compromises
the safety of the driver, goods,
passengers, and bystanders. In June
this year, BharatBenz opened its first
genuine parts outlet in Coimbatore
and has plans to extend this to other
parts of the country.

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Global supply chain
standards enabling
Delhi Excise curb
counterfeit in liquor
As per industry estimates, India
consumes around 91 million cases of
alcohol (IMFL), with a growth rate of
around 8%, in each quarter. In India,
the sector is swamped by various
social and regulatory hurdles. Mostly,
it is trade controlled by the State
Government, where the paramount
importance is given to consumer
safety.
However, accurate & reliable
information on liquor brand/products
is inaccessible to the consumers due to
regulatory concerns. In this endeavor,
it becomes imperative to control the
counterfeit product, as soon as it
enters anywhere in the supply chain,
starting from manufacturer to the
end-consumer.
To facilitate the information exchange,
The Delhi State Excise Department
developed an app that enables spot
check by scanning the barcodes. The
mLiquor app allows tracking the
status of each liquor bottle using its
barcode and reporting illegal liquor to
the control room which has ensured
that sufficient data is present in the
public domain for decision making,
trends, take corrective actions.
The app also helps in the Monitoring
of stocksthroughthedigitalrepository
it powers as well as to establish a
First in First out inventory valuation
method, which has been considered
the most effective inventory valuation
method, theoretically.
Distillers and manufacturers identify
bottles and cases with unique product
identification codes (GTINs based on
GS1 Standards). The two-dimensional
GS1 Data Matrix barcodes encoded
with the product GTIN and Serial
Number are applied on the bottles
and mono cartons. And the one-
dimensional GS1-128 barcodes are on
the cases/shipper with GTIN, date of
manufacturing, best before date and
batch number.
The solution not only helps in the
unique identification of the liquor
bottles in the supply chain from the
bonded warehouses to the retail outlet
but they also help with the automation
of daily sales, tracking of the liquor
bottles, and inventory reporting. This
helps authorities to know exactly
how many bottles/cases are at which
location at any given time.
Citizens of Delhi benefit too.
Consumers can use a mobile app
(mLiquorSaleCheck) to Check the
genuineness of the purchased liquor
bottle using their mobile phones.
When the barcode pasted on the
liquor bottle cap is scanned the app
provides information about the
product such as brand name, quantity,
price and the shop name from where
it has been purchased. Consumers
can also submit grievances using this
app in case the liquor was purchased
at another source from the one
mentioned preventing the entry of
unauthorized goods in the supply
chain.
Source: GS1 India
News

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What is the impact of the spurious liquor
industry for the government, people and
the IMFL industry?
Illicit trade in alcohol undermines sustainable economic
growth.
Collectively, it affects all the stakeholders in society in
various terms. While the industry and Government lose
revenue, it is the consumer who is impacted the most as
illicit trade in liquor poses a serious threat to consumer
health. Poor quality or spurious liquor can cause death
and serious illness, as seen in connection with several
incidents of hooch tragedy in India. According to
various media reports, more than 250 persons died in
India due to hooch tragedies in the year 2019.
Excise duty which is an important source of revenue is
continually under threat from the practice of illicit trade.
Considerable amount of money which could be used to
benefit the government services of a country are being
diverted to the pockets of criminals participating in illegal
trading. However, more than the loss of tax revenue it
could cost Government loss of image/goodwill. The
hooch tragedies occur due to illicit liquor consumption
eroded the image of state governments which createsa
challenge for the state government to ensure consumer
confidence.
How can the government streamline the
industry to benefit the poorer section of
society to get affordable liquor at a price
which will deter rampant drinking and the
alcobev industry should not be labeled as a
sin industry?
There is a direct link between prices and consumption.
Post hooch tragedy in Uttar Pradesh, the Department
set up a committee, which found that poorer sections are
using smuggled liquor, as it was available at almost half
of the price of Government Country Liquor bottles.
This will continue to be an area where careful thought is
needed in order to preserve a balance.
What are the challenges of fighting the
illicit liquor trade? How can the FSSAI
regulate the quality of liquor sold?
Illicit alcohol is prevalent in both developed and
developing countries, with no country immune to this
threat. For example, the UK government lost £1.3 billion
in excise tax revenue in the period 2015-16, and Dutch
authorities estimate the annual revenue losses from illicit
trade in alcohol at €100 million. Liquor bootlegging in
New York City alone is estimated to have cost the city
US$1 billion in lost taxes over the past 15 years. The
illicit alcohol products are sold as either counterfeit of
genuine brands or are unlabelled. (Source: TRACEIT.
ORG) When producing counterfeits, the forgery goes
beyond the product’s label, often including bottle designs
and caps.
In India, State Excise Department faces various
challenges such as a) How to combat smuggling and
illicit liquor b) How to ensure foolproof labeling and
supply chain? How to ensure consumer confidence c)
How to increase excise revenue and the most important
the problem of identification/authentication - How to
differentiate fake liquor bottles from genuine?
The Food Safety and Standards Authority of India
(FSSAI) had last year issued a regulation on alcoholic
beverages and the same became effective from April 1.
As per this regulation, all liquor bottles need to carry
a statutory warning that “consumption of alcohol is
injurious to health. Be safe-don’t drink and drive”. So
far, it was primarily regulated by excise commissioners
India needs a comprehensive national policy to
tackle alcohol and other forms of additives.
Mr. Nakul Pasricha
President, Authentication Solution Providers’
Association (ASPA) gives insights on the cons of the
spurious liquor industry.
FACE TO FACE

15
and they were only looking at alcoholic content and the
toxic substances in alcohol. Now, there are far more
elaborate standards that are benchmarked with the
global standards and in certain cases, they have taken
the Indian context also into consideration. In addition
to excise commissioners, the food safety commissioners
would also look into the enforcement of these standards
What role can the excise department play to
boost revenue to ensure a win-win situation
for the government, the consumer and the
industry?
Excise Departments faces various challenge. The key
from these are Revenue enhancement & protection, as
well as to ensure a person get genuine products. Anti-
Counterfeiting solutions like TAX Stamps (Excise
Adhesive Label) plays an important role. We believe that
State Excise Departments need to study the importance
of Tax Stamps in the global context and apply such
solutions in India.
In India, the Excise Department needs to think about
TAX Stamps as a tool beyond tax collection tools. The
existence of cheaper, less-sophisticated, less effective
stamps and marks potentially dilute the value proposition
around their use as platforms to implement the global
guidelines. Instead of using it is a mere product, they need
to reframe their work on their Tax Stamp Program as an
opportunity for consumer & industry empowerment.
The new generation Tax Stamps with technological
innovation in security printing, serialized coding, data
processing, and mobile communications, can be into
sophisticated devices with additional roles that related
to product authentication, supply chain security & data
intelligence. This will ensure and help the State Excise
Department in building its policy towards reducing
consumption and more revenue.
Will a rationing system deter excessive
drinking?
We think this differsfrom case to case basis and lots
depend on State Excise Policy. About half a century
ago, broad restrictions on who could purchase alcoholic
beverages were fairly common. The most extensive of
such systems was the Bratt rationing scheme in Sweden
in force until 1955, which assigned a quantitatively
defined upper limit for spirits purchases per person with
different ratios for males and females and for younger
age groups. Studies have shown that rationing systems in
Greenland, Poland and Sweden reduced alcohol-related
harm (Anderson & Baumberg, 2006). In Spitzbergen
(Norway) there still exists a rationing system for
purchases of alcoholic beverages. However, this research
is conducting a long time back and needs to be done in
the current geographical scenario. Source: http://www.
euro.who.int/__data/assets/pdf_file/0011/191369/9-
Availability-of-alcohol.pdf?ua=1
Can cheap liquor manufacturing companies
create a fund to help families affected by
alcoholics?
Yes, it can be done in partnership with the State Excise
Department and various NGOs. But, before that,there
is a need for creating & raising awareness at the mass
level. There is a need to take preventive as well as long
term strategic goals. As preventive steps, there is a need
for building eco-systems where consumers get a genuine
and authentic product and must be involved in the
authentication process. In longer-term strategy, a lot of
work needs to be done towards liquor standardization,
monitoring of ethynyl alcohol, etc. etc. Even today, in
our Hospitals, are not well trained for treatment for
people suffering from hooch incidents. Post the hooch
tragedy in Uttar Pradesh, the Government committed to
finding that there is a lack of guidelines in Hospitals for
treatment of patients consuming spurious liquor.
Is banning illicit liquor the way forward?
Prohibition is not the only answer. Many times,
prohibition leads to increased illicit liquor business.
For example, Liquor is prohibited in Gujarat, however,
according to a recent study 38% of youth in Gujarat
consumer alcohol. Other than this, 12% of people are
consuming other forms of drugs such as cannabis. In
the last two years, police had seized liquor valued Rs
254 crore. The Government had confirmed that due
to prohibition there is an increase in smuggling from
a neighboring state. In the last two years,the total case
reported132415countryliquor,29989IMFLliquor.Now
the state government is demanding compensation cost
from central as they are losing Rs 15000 crore annually
due to prohibition. Similarly, in other prohibited states
Bihar, the sale of other drugs products has increased
significantly. As per the latest report from the Narcotics
Control Bureau, Bihar top the chart in consumption
of opium and hashish. In our country, 16 crore people
consume alcohol whilst 3.1 crore people use cannabis.
India needs a comprehensive national policy to tackle
alcohol and other forms of additives.
The interview was first published at Ambrosia Magazine.
FACE TO FACE

16
Interview with
Sean Worthington, Raidatech
You launched RAIDATECH in 2018, what
is it, how does it work and how it is going
to help the organisation in the fight against
counterfeiting?
The biggest problem with anti-counterfeiting is that no
one wants to pay for it and it does not provide much
value after it works. In our system, anti-counterfeiting
is just a side effect that brands get for free. What we
provide is customer engagement. We actually write
money on the packaging and this money can potentially
be used anywhere in the world. It is a strong incentive
for customers to engage with the brand. Like the H&S
Green Stamps of the past, consumers get rewarded. But
unlike those stamp programs, we can bring customers
to a brand’s website and social media to help the brand
go viral. Most importantly, we can provide data points
that allow brands to know if their marketing is working
or not.
It works by creating a RAIDA (Redundant Array of
Independent Detection Agents). The RAIDA consists
of 25 Clouds each located in a different jurisdiction all
over the world which are controlled by independent
operators. We authenticate items by contacting all the
Clouds in parallel. Because of the speed of light, this
process only takes a few seconds. Each item will have 25
authenticity numbers that correspond to each RAIDA.
If I have the item, I know the codes. Whoever knows
the codes is the owner. If you want to buy something,
you willgive the seller your codes. Anyone who knows
the codes can change the codes. When they change
them, they are the new owner. We call this “Powning”
or password owning.
You mentioned that most digital
authentication technologies rely on
an online / cloud-based database or
blockchain to reconcile data. How is
RAIDTECH different from others? Why
it cannot be hacked?
RAIDATech has invented a new authentication protocol
that allows for “Data Supremacy”. Data Supremacy is
when a database does not have an owner and cannot
be shut down by governments, hackers or even the
creators. There are only two other systems like this:The
Blockchain and the DNS (Domain Name System). Our
system is based on the DNS. The DNS system has never
gone down since the day it was created in 1985 and
serves billions of requests every day from every internet
user in the world. RAIDA, like the DNS, it is very fast,
can handle the entire world traffic and is very energy
efficient. It blows the Blockchain away!
The way that Data Supremecy is achieved in the RAIDA
is by eliminating any system risk that could bring down
the system. It is assumed that hackers will hack an
RAIDA but the data they get will be of no use because
there are 24 others that they did not hack. Individual
components are vulnerable but the system as a whole
can take massive damage and keep working.
What is your business model & how is
the response of Brand owners towards
your solutions?
We have received very good responses from billion-
dollar Brand owners. Since we started last year, we were
able to raise money faster than Facebook did when it
started and we have been quick to make a lot of revenues.
Our model has been to partner with packaging
companies. They know their customers. We are happy
to be the nerds in the back room that makes sure the
technology is working. As a computer scientist, the
marketing and sales stresses me out.
Finally, where do you see RAIDATECH
in the next five years?
I think we are going to be a “must-have” add-on if
Brands want to compete in the future. Brands need to
know is that customers are getting richer and they are
moving up on Maslow’s hierarchy of needs. Products
that want to stay high-end need to provide more than
just functionality. Bands need to ask themselves, how can
my product help my customers to achieve belonging and
love? What about prestige and accomplishment? How
about helping people to engage in creative activities and
reach their full potential? RAIDATech has the answer
and we will throw in an anti-counterfeiting system for
free!
FACE TO FACE

17
The Authentication Times | Issue 37 Innovation
Innovation in Authentication
Introduction
The early cave paintings and
Chinese magic mirror attest the
fact that man has always been very
fascinated about creating image
and using interference of light.
Holography was born at the time of
Indian independence, but became
a real technological possibility
when laser was invented in 1960.
The technologyhas been visualized
many invisible avenues and seems
to have advanced rapidly in recent
times, as a consequence, holograms
have started appearing everywhere:
on credit cards, magazine covers,
advertisements and medical images,
to cite a few.
Intellectual Property
Intellectual property protection in
holography has been an integral
part of business since Dr. Gabor’s
invention of the theory of
holography in 1947.The beginning
of 1970s when the first holographic
material patents have appeared and
in the course of the last 50 years
thousands of patents have been filed
which are creating valuable assets
for their owners. Besides protecting
their owner’s products, these patents
are valuable possessions that can be
licensed, sold, leased, and used as
collateral for business financing.
Innovation in
Authentication
Authentication is a very old method.
As time passed, people started
offering authentication services and
also started protecting rights in their
inventions in authentication field.
We have patents in authentication
related innovations since late 80s.
This is an area which requires
constant innovation because if
security features become old, they
can be easily used by counterfeit
manufacturers too. So, there is high
demand of bringing new invention
in this field of authentication. Since
last 5 years the patent databases are
full of patent applications with multi
featured authentication features
from optical security to track and
trace system.
Patents Trends in
Authentication
Certain broad key terms related
to authentication technology were
executed by Patentwire on database
[questel orbit, 19-06-2019] and
following trends were observed in
output patents/applications in the
domain of authentication.
Patent trend in
Authentication
Technologies worldwide):
The technologies which are prevalent
in the field of authentication are
- EAS Tags and System, Tamper
Evident Label, Tamper Evident
Closure, Taggant, Substrate Security
Paper, Currency Authentication,
SecurityPrint,SecurityInk,Trackand
Trace System and Optical Security.
According to our observation,
“Optical security” and “Track and
trace system” are the most used
technology in patent publications
authentication innovation domain.
Optical security is leading
technology in authentication due to
highly useful holography techniques.
Hologram technology offers three
levels of security – covert, overt
and forensic hence it is the security

18
features of choice for securing the
critical personal data in a passport
or on an ID card against tampering,
alteration, forgery or counterfeiting.
Patent trend in
Authentication
Technologies (India)
The search was conducted using
same parameters as used worldwide,
but only India was opted as the
Publication jurisdiction. According
to our observation, here also
“Optical security” and “Track and
trace system” are the most used
technologies in patent publications
in authentication innovation domain.
ASPA members,
contribution in innovation
in authentication:
De La Rue and SICPA are having
abundant patent in their accounts.
But the total patent applications filed
so far from other ASPA members
cumulatively, is below 200. [Questel
Orbit; 08-07-2019; 151 total results,
when All ASPA members were kept
as assignees (excluding De La Rue
and SICPA)]. However when these
151 patents were analysed for their
technology, only 31 patents were
filed in the field of authentication.
In ASPA members, De La Rue has
more than 750 patents; SICPA has
more than 500 patents, and then
comes Manipal technologies with 12
patents in authentication followed
by Pharmasecure with 7 patents in
authentication.
Jurisdiction Trend:
China is leading jurisdiction in filing
patents for authentication related
technologies, followed by United
States and Japan.
Recent Trend:
More than 50% of the patents
have been published in last 5 years.
However the technology trend
remains the same as Track and trace
and optical security technologies
are leading in the recent innovation
trend too followed by security inks.
This indicates increased interests in
authentication related innovations in
recent years. Increased counterfeiting
due to increased online shopping
sites has also made the innovators
to find new ways to deal with
counterfeit products and hence
resulted in abrupt innovations in
authentication field in last few years.
Key highlights of
IP landscape on
Authentication:
• Optical security and Track
and trace system are the most
used technology in patent
publications authentication
innovation domain.
• De La Rue, SICPA and Dai
Nippon Printing are the top
assignees.
• China is leading jurisdiction in
filing patents for authentication
related technologies, followed
by United States and Japan.
• More than half of the
publications in authentication
came in last 5 years.
Conclusion:
Holography by its nature tells an
amazing story of its development
and its integration of modern
science and technology. Through
its development journey, the
technology created new communities
and flourished with them. Its
progression from Cinematography
to Authentication has been
distinctly different from what
their creators might haveexpected.
Through its fascinating journey, the
technologies of holography imbibed
withmodern sciences, emerged with
more realistically applications, and
perspiredtheir future trajectories.
Innovation
Lalit Ambastha is founder of Patentwire, an Independent Patent & Technology Consulting Firm. He is
Patent Attorney in India and is specializing in the area of Intellectual Property. He can be reached at
lalit.ambastha@patentwire.co.in
Innovation

19
The Authentication Times | Issue 37 ASPA & Member News
ASPA gear up to fight fakes -
Signs agreement with CSIR, reform
organization structure and organizing
3rd Authentication Forum
Authentication Solution Providers’
Association (ASPA) and CSIR
– NIIST (National Institute for
Interdisciplinary Science and
Technology, Ministry of Science
and Technology, Government of
India) have signed an MoU for
knowledge sharing, research, and
development of new generation
physical and digital authentication
solutions. The decision was taken
in the recently concluded annual
general meeting (AGM) of
ASPA where the association also
announced its new governing body.
Nakul Pasricha, CEO, and
president, PharmaSecure has
been elected as the new president
of ASPA, in recognition of his
ongoing efforts to promote
the digital authentication
industry in India. Pasricha, said,
‘ASPA has decided to focus on
research and advancement and
innovation, upgrading their
current technologies, systems, and
processes to cope up with the
global markets. The Association
has been a driving force in bringing
awareness around the benefits of
authentication tools in stakeholders
- government, decision-makers,
business leaders and customers.
Arun Agarwal, chief executive
officer of Kantas Track Pack
India, will hold the position of
vice president. Luv D. Shriram
will be the general secretary and
treasurer, U K Gupta is ex-officio
and Nityanand Shenoy and Dinesh
Jain are co-opted, members.
Sanjay Kumbhat and Ashish
Chandra are also members of the
governing body. To strengthen the
authentication solution ecosystem
in the country, the Association
has also concentrated its energy
on formation of regional chapters
and committees and apart from
Governing Body, three new
regional chapters were formed
(Eastern, Western and Southern)
to initiate awareness programs,
achieving the vision and mission
of the Association. The new
regional chapter head will be for
period 2018-20 are Mr. Dinesh
Jain, Holosecurity representing
South, Mr. Manoj Kochar,
Holoflex representing East and
Mr. Nityanand Shenoy, President
& MD, PRS Permacel as West.
This will help the association to
reach close to indigenous Indian
brands and more importantly the
consumers.
Apart from these, the association is
also organizing The Authentication
Forum 2019, 3rd leadership
summit on anti-counterfeiting and
brand protection will be held on
7-8 November 2019 at Hotel Lalit,
New Delhi.
According to ASPA, Vice-
President, Arun Agarwal, “ASPA
is looking to expand knowledge
and availability of promising
anti-counterfeiting technologies
including blockchain, artificial
intelligence, NFC, RFID,
traceability and other covert and
overt physical authentication
features and speeding up its
ongoing campaigns like Make
Sure India and brand protection
awareness initiatives across India”.
Photo caption: ASPA members at its Annual General Meeting 2019 held in Pune, India

20
ASPA provides overview on Tax
Stamps in India at Tax Stamp
Forum 2019
ASPA organize seminar at ProPak India 2019
ASPA Secretary, Chander S Jeena
represented the association at
recently held Tax Stamp Forum
at Budapest, Hungary. The 2019
event was attended by just under
240 attendees from 50 countries
and 116 different organizations. In
addition, around 25 government
organizations from across the
world were in attendance, mainly
consisting of tax revenue authorities.
These included authorities from
Guyana, Chile, Israel, Poland,
Rwanda, Kenya, Uganda, Georgia,
European Commission, Pakistan,
Bangladesh, Sri Lanka, Mauritius,
Botswana, India, Thailand, Italy,
Spain, Ireland, Taiwan, Moldova,
Lesotho, Romania and of course
the host nation, Hungary.ASPA
Secretariat presented a paper on
“Overview of Tax Stamps in India –
Key Learnings and Developments”.
It is to be noted that India has a good
potential market for Tax Stamps
in India for Liquor and Tobacco
products. He emphasis on need
of approach towards Tax Stamps
beyond tax collection tools need
of combination of technologies,
and selection of ethical vendor for
successful Tax Stamp program.
ASPA in association with Informa
organized a seminar on Anti-
Counterfeiting Trends and
Developments in Packaging on 23rd
October at ProPak India. The 2nd
edition of ProPak India was held
on 22-24 October 2019 at Bombay
Exhibition Centre, Mumbai. Over
100 exhibitors including from
Germany, Italy, China, Singapore
and other countries present their
latest technology and innovation of
machinery, materials, process control
and testing, and automation for the
processing and packaging market.
The event got support from key trade
bodies including the All India Food
Processors’ Association (AIFPA),
Flexible Packaging and Folding
Carton Manufacturers Association
of India (IFCA), Association of
Food Scientists and Technologists
(India)-Mumbai Chapter, Indian
Authentication Solution Providers’
Association (ASPA), and SIES
School of Packaging.
During the Seminar, Mr. Mahendroo
share his view on integration of
physical authentication technologies
such as security hologram with
traceability, whilst, Mr. Gaurav
Sathaye from United Ink shared
detailed view on latest developments
in security inks. Mr. Anshul speaks
about creative strategies adopted by
Brand to protect themselves from
counterfeiting efforts. A solution
which can help consumer verify the
product as genuine, which eliminates
counterfeiting from supply chain
is a win-win for everyone. The
event was well attended by Brand
owners, consultants and packaging
professionals.
Picture: Left to right, Chander S Jeena, Secretary, ASPA, Gaurav Sathaye, CEO, United
Specialty Ink, Anshul Gupta, Country Head, Sproxil and Dewakar Mahendroo, AVP –
Business Solutions, Holostik India
ASPA & Member News

21
The Authentication Times | Issue 37 ASPA & Member News
ASPA was pleased to be associated with the 2019 edition of Smart
Card Expo held on 25-27 September at the Greater Noida Expo, India.
ASPA President inaugurated the show alongwith other dignitaries
and exhibited at the show. The 2019 editions of electronica India
and productronica India hosted more than 650 exhibitors from over
18 countries making them the biggest trade shows for electronic
components and machinery in India.
De La Rue reforming appoints new CEO
Kezzler announces further strengthening
of its Asian operations
De La Rue plc has announced the appointment of
Clive Vacher as Chief Executive Officer and an
Executive Director with effect from 7 October 2019.
Clive Vacher joined De La Rue on as the replacement
for Martin Sutherland who announced his departure
in May. De La Rue said, “Mr.Vacher had significant
experience of business transformation from 16 years
in senior positions at industrial companies, including jet
engine manufacturer Pratt & Whitney and Rolls-Royce.
He was most recently chief executive of Canadian
semiconductor and transistor manufacturer Dynex
Power”.
De La Rue also reaffirms that it will continue with
the proposed reorganization of the business into two
Divisions, to enhance strategic focus and generate
greater efficiencies. The Group’s operating model is
being realigned to focus on two businesses, Currency
and Authentication, each requiring distinct products
and solutions, and pursuing different strategic and
operational priorities.The new Divisions will be led by
Ruth Euling, Managing Director, Currency (previously
Global Sales Director for Currency), and Andrew Clint,
Managing Director, Authentication (previously Global
Business Development Director PA&T).
Kezzler announced that they are set
to strengthen their Asian operations
by expanding in Singapore with the
appointment of Pengfei Zhang as
Director of Pre-sales and Delivery.
The appointment follows an
increasing demand for serialization
and traceability business and
consumer engagement services in
Asia.
Prior to Pengfei Zhang´s
appointment in Singapore, he was
a Senior Engineering Architect at
Kezzler’s Headquarters in Oslo since
July 2018. He joined Kezzler after 11
years with Schlumberger, where he
was a Senior Software Engineer and
Architect, based out of their Beijing
R&D Center and Oslo Technology
Centre. The Singapore office is one
of two service points Kezzler now
has in the region, after the company
proudly announced the opening of
their first Chinese office in Beijing,
back in July 2019. In addition to
Singapore and China, Kezzler’s
global network of offices also
includes Norway, India, the USA,
and the Netherlands.
ASPA at Smart Card Expo 2019

22
The Authentication Times | Issue37Cannabis News
Center to
Allow Scientific
Research on
Cannabis
Monitored growth of cannabis will be allowed at the
Central Institute of Medicinal and Aromatic Plants in
Uttar Pradesh and Uttarakhand
The Indian government will allow cannabis research for
the first time, with the narcotics department sanctioning
a research and development project to examine
substances found in the plant.
The Vedas speak about cannabis as a sacred plant, but it
was banned due to drug abuse. Apart from prohibiting
cultivation, sale, and possession of the drug, India had
also decided not to tap into its potential medical benefits.
Now, the narcotics department within the Union finance
ministry has sanctioned a research and development
project on compounds such as cannabidiol (CBD)
and tetrahydrocannabinol (THC) found in cannabis,
commonly known as ganja. While the former is used in
gels, oils and has medicinal use, the latter is responsible
for the psychoactive effect.
Earlier this year, the World Health Organisation
proposed recategorizing cannabis in international law
due to growing evidence supporting its medical use. A
number of countries have also moved to legalize the
sale of the drug for medicinal purposes.
The narcotics department’s sanction means that
cannabis will be grown in a monitored way, at the Central
Institute of Medicinal and Aromatic Plants (CIMAP) in
Uttar Pradesh and Uttarakhand.
India doesn’t allow the cultivation of cannabis.
Cannabis, coca, and opium are prohibited for any
general cultivation, consumption or possession under
the Narcotic Drugs and Psychotropic Substances Act,
1985. The Act allows cannabis to be used only for
medical and scientific purposes.
According to a note released by the government, the
plan is for the Council of Scientific and Industrial
Research (CSIR) and CIMAP to work on the “genetic
improvement of identification and selection of THC,
CBD, and cannabinioderpene.”
This note has been sent to all state governments as
well as the director of narcotics control in the finance
ministry.
High levels of THC is responsible for the psychoactive
nature of cannabis. Cannabis with low THC content can
be used for industrial and horticulture purposes. It can
also be used for biomass and production of cannabis
seed oil. CBD extracts can be used in oils and food
supplements and also has medicinal use.
Last year too, there was talk about medical cannabis
being approved in India. When used correctly, it can
help to manage pain, cancer, epilepsy and sickle cell
anemia.
The Indian Institute of Integrative Medicine (IIIM) in
Jammu is reportedly working alongside CSIR on this
research. The institute plans to conduct clinical trials
along with the Tata Memorial Centre (TMC) in Mumbai,
the All India Institute of Medical Sciences and a Raipur-
based hospital. Some animal trials were conducted
previously, and the institute said last year it hoped to get
regulatory approval for human trials.
At a recent event organized in partnership with India’s
AYUSH ministry, some AYUSH experts pitched for
the legal use of medical cannabis, especially in pain
management.
Currently, some Indian companies have been using
hemp, also made from cannabis but without its drug
properties, to make textiles and accessories.

23
The Authentication Times | Issue 37 Cannabis in News
ASPA News

24
The Authentication Times | Issue37Cannabis in News
ASPA News
D-242, Sector 63, Noida, U ar Pradesh 201 301
Phone: 0120-4289778
E-mail : info@ktpil.com • Website : www.ktpil.com
Member of:
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The Authentication Times, Issue 37

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