Telangana Gains From Application Fee For Liquor Shops

It's a never-before-seen high for Telangana as the Prohibition and Excise Department managed to collect Rs 2,639 crore without selling a single bottle of liquor.

The government collected this money from nearly 1.32 lakh applications, charging Rs 2 lakh non-refundable application fee each for allotment of 2,620 liquor shops.

The process of issue of licence after allotment by lottery districtwise happened on Monday.

Those who get the licence have to pay a licence fee of Rs 50 lakh to Rs 1.1 crore per annum, depending on the population of the area where the shop has been allotted. They have to pay one sixth of the annual licence fee by Aug. 23.

So, a retail excise shop in an area with population up to 5,000, will pay Rs 50 lakh, while the person holding licence for a retail shop in an area with a population over 20 lakh will pay Rs 1.1 crore for a year.

The collection this year nearly doubled from the Rs 1,370 crore collected from about 69,000 applications when licences were issued two years ago. Through the shop licence fee, the government earned Rs 3,500 crore.

In terms of margin, traders can make 27% for an 'ordinary' brand and 20% for premium varieties.

Interestingly, there is reservation in the allotment of licence too, with 786 licences or 30% for disadvantaged sections. Out of this, 15% is meant for Gowdas, who are traditionally involved in toddy tapping and liquor sale, 10% outlets for Scheduled Castes and 5% for Scheduled Tribes.

The process of accepting applications along with non-refundable Rs 2 lakh application fee began on Aug. 4 and concluded on Friday. The shops can begin operations from Dec. 1 as the licences previously issued are valid till then.

According to people with knowledge of the matter who spoke on condition of anonymity, election season is coming up this year and next year. Liquor consumption has grown along with economic growth, boost to business events, hospitality and tourism. Therefore, more people are keen to get into the business, the persons quoted above said.

Hyderabad will have 615 shops. The highest number of applications has been received from Serilingampally, which is in the IT corridor of Hyderabad and in the Shamshabad area, where the airport is located. For a shop in Saroornagar area of Hyderabad, 10,908 applications were said to have been received.

Applications were received not just from Telangana but other states as well, including a sizable number from Andhra Pradesh.

Revenue from liquor sales has doubled in Telangana from Rs 12,703 crore in 2015–16 to Rs 25,585 crore in 2021–22. In the last one year, sales are estimated to be nearly Rs 30,000 crore.