To increase liquor sales in Telangana, the state government has lowered prices and is now considering a shift to an auction system for liquor bars. This would mean abandoning the current license renewal process and requiring bars to participate in an auction, similar to what is used for liquor shops. Sources with inside knowledge suggest that the state is preparing to issue directives on this change shortly. More than 1,400 bars in Telangana would be affected by this new policy.
Under the current renewal system, bar owners are required to pay an annual fee of INR 41 lakh and an application fee of INR 2 lakh. If these conditions are met, the license is automatically renewed.
At present, liquor shop auctions take place every two years. In Hyderabad, prime location liquor shops are required to pay a license fee of nearly INR 1 crore.
“This might be the case for bars too. And the license system may be in vogue for one or two years, but we can’t say how many bars will pay this kind of fee,” said industry sources.
“The new system will not prevent anyone from applying for licences and in fact, many will now be open to bidding, but there is concern about those who want to offer others for goodwill, but not get a good deal,” the sources said.
Hyderabad and Rangareddy are popular urban areas with high liquor sales, contributing significantly to the state’s revenue. Many bar owners have reportedly invested heavily in recent times to renovate and improve the interiors of their establishments. However, at that time, the state government did not suggest any increase in taxes based on turnover.
The Telangana government issued an order that permits certain shops and establishments to operate 24×7 by exempting them from Section 7 of the Telangana Shops and Establishments Act 1988. However, this exemption does not apply to bars and liquor stores. The order applies only to shops and establishments that fall under the definition of Section 2 (21) of the same Act. The government has made it clear that the April 4 order does not extend to liquor stores that come under the excise and prohibition department’s jurisdiction.
