The retailer margin on beer has been reduced from 25% to 20% and will adversely affect the revenue of over 40% of liquor shops, say liquor dealers.

Additional taxes hiked licence fee New liquor policy introduced in Telangana
news Administration Friday, October 04, 2019 - 09:16

The new liquor policy of Telangana unveiled on Thursday has hiked licence application fees and has laid down new excise tax brackets for liquor shops. The new policy could lead to an increase in liquor costs in the state, point out liquor shop owners.   

Under the new policy, the non-refundable application fee for liquor shops has been hiked from Rs 1 lakh to Rs 2 lakh. In 2017, the fee was hiked from Rs 50,000 to Rs 1 lakh and had helped collect over Rs 400 crore as licence fee from over 41,000 applications.

The Revenue Department has also issued notification on the allotment of retail liquor shops licences for 2019-21. The new excise policy is expected to come into effect from November 1, 2019. The present number of retail shops in the state stands at 2,216. 

A special retail excise tax of Rs 5 lakh per annum will also be collected from the liquor shops as a one-time collection per licensee. The retailers will have a fixed margin at 27% of ordinary and premium varieties of IMFL and FL and 20% on beer. 

A total of six fee slabs have been set up for the traders to get a licence — the fee will range from Rs 50 lakh to Rs 1.1 crore and the rate varies depending on the population density of where the shop is to come up. Earlier, the tax slab of Rs 45 lakh has been split into two slabs, that will collect a fee of Rs 50 lakh and Rs 55 lakh. The previous tax slab of Rs 55 has been split into two to collect Rs 60 lakh and Rs 65 lakh. 

Speaking to TNIE, the Telangana wine dealers association president D Venkateswara Rao said, "The retailer's margin on beer has been reduced from 25% to 20%. As much as 40% of retailers share of profit is from beer and reducing the same can cause us losses."

While the state is expected to generate an estimated Rs 132 crore from the sale of liquor licences, the new policy also has irked liquor shop owners who say they will be forced to sell liquor over the MRP. TOI quoted liquor shop owners mulling a hike of Rs 5 above MRP on each bottle. 

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