Maharashtra govt partially rolls back hike in liquor license fees

The latest hike was expected to grow revenues by ₹200 crore for the department, which earns about ₹1,000 crore annually from license fees.

In a relief to the liquor industry, the state government has partially rolled back the previous hike in license fees for liquor vendors. In January, the Maharashtra government had increased the license fees by an average of 15 percent, leading to industry bodies taking umbrage.

The state excise department issued a fresh gazette notification dated 25 March reducing these license fees. (HT PHOTO)

“We have tempered the hike in license fees that was introduced earlier. This was done because the industry said this would affect their financial health just as they were recovering from the impact of the pandemic,” said a senior state excise department official.

Maharashtra has given out around 32,000 licenses across categories to distilleries; wine and beer vendors; bars; units that manufacture beer, country liquor, Indian Made Foreign Liquor (IMFL), among others. This includes around 15,000 licenses for permit rooms and beer bars, 4,000 country liquor bars, 5,000 beer and wine shops and 1,680 wine shop licenses.

The latest hike was expected to grow revenues by ₹200 crore for the department, which earns about ₹1,000 crore annually from license fees. The state excise has a revenue collection target of ₹19,500 crore for the 2021-22 financial year.

On 28 January, the state government had hiked license fees for bars and restaurants in Mumbai which hold the permit room license from ₹6.93 lakh in 2021-22 to ₹7.97 lakh for 2022-23. Similarly, the wine shops in the city would have to shell out ₹15 lakh in the coming financial year versus the ₹10.39 lakh earlier.

The state excise department issued a fresh gazette notification dated 25 March reducing these license fees. Now, a permit room in Mumbai or cities with a population of over 20 lakh, will have to pay a marginally lower fee of ₹7.45 lakh, while the wine shops will pay ₹12.69 lakh.

The license fees for liquor retailers are based on the population of the city, village or town that they operate in. For instance, fees for a wine shop may range from ₹1,93,400 in areas with less than 50,000 population to ₹10,83,200 in areas with a population between 10,00,001 and 20 lakh and ₹12,69,800 in cities like Mumbai, which have a population of over 20 lakh.

However, despite the partial rollback, liquor and hospitality industry stakeholders are not enthused. Adarsh Shetty, past president and adviser of the Indian Hotel and Restaurant Association (AHAR) noted that the hospitality sector had been intensely affected by the Covid-19 pandemic induced lockdown and subsequent restrictions.

“In this pandemic situation, hospitality was the first industry to shut down and the last to reopen. The sector is going through turmoil… we have to pay license fees in advance. The business was affected due to the lockdown and restrictions like 50 percent occupancy cap,” he noted, stating that the hike came at a time when they were struggling to get back to their feet.

“The entire industry has been left to fend for itself. Many (license holders) may not be able to pay these fees,” admitted Shetty.

Dilip Giyanani, chairman, Maharashtra Wine Merchants Association (MWMA), said that the previous hike in fees was unreasonable and way beyond the normal trend. He, however, welcomed the state government’s decision to reduce it.