Telangana Government plans to present registration fee to avoid paying 18 percent GST on the license fee.
Hyderabad: Telangana State government is likely to follow the AP example to evade GST being charged on the license fee paid by liquor shops and bars.
In Telangana, the excise year is from the month of September to August. To make sure that it endures collecting the profitable excise revenue without rebelling the Supreme Court order that commands that liquor cannot be vended 500 meters from a state or central highway, the state government appealed the National Highway Authority to de-notify national highways in GHMC bounds. The NHA has obeyed and given out a notification to this effect.
Telangana government gathers Rs 1.8 crore in license fee from every wine shop and charges Rs 40 lakhs for bar license in Hyderabad. In the regions, the license fee for wine shops varies from Rs 20 lakh to Rs 60 lakh based on the size of the populace. For bars, there is a normal license fee of Rs 40 lakhs.
State governments need to pay 18 percent GST on the license fee collected by them. To evade paying this, the AP government has announced a registration fee and condensed the license fee. Telangana government is thinking of doing the similar thing.
Liquor shop traders need to pay 14 percent tax if their yearly turnover crosses 7 times the license fee. After the division of states, the AP government removed this ailment but TS continued with it.
In the recent liquor policy, the Telangana State government is also thinking of eliminating this condition. Wine traders say this will aid only big dealers and small traders, whose sales are under Rs 50 lakh, will agonize. With the seven times revenue tax system, all traders are selling liquor at max MRP. Once this condition is removed, big traders will sell liquor at under MRP to upsurge their turnover, but small traders cannot.
An illustrative of the TS Wine Dealers’ Association said that they are requesting for the seven times revenue to be increased to 14 times instead of eliminating this condition. The state government is remunerating a 20 percent margin to dealers now and is thinking of dropping it to 10 percent to get extra revenue.
A senior official of the revenue department said that they are thinking of implementing GST. The new excise policy emanates into action from September