Karnataka slashes proposed excise licence fee hike to 50 pc, extends renewal period to 5 years

BENGALURU: The Karnataka government on Thursday rolled back its earlier plan to double the excise licence renewal fees and instead increased it by 50 per cent, following intense opposition from liquor sellers. The government also announced that the licence renewal period has been extended from one year to five years, offering long-term relief to industry stakeholders. The revised rates will come into effect from July 1.

The government had earlier issued a draft notification on May 15, proposing to double the licence fees across categories to boost revenue. Several representatives, including the Karnataka Liquor Sellers’ Association members, met with Chief Minister Siddaramaiah and urged the government to reconsider the hike.

They had requested a more moderate increase of 20 to 25 per cent. After reviewing the objections, the state government issued a fresh order implementing a 50 per cent increase instead. The new renewal fees vary depending on the population size of the area. For metropolitan corporations with a population over 20 lakh, the annual renewal fee has been set at Rs 9 lakh. In other metropolitan areas, the fee is Rs 7.5 lakh.

Outlets in municipal corporations will pay Rs 6.75 lakh, while those in towns, municipalities and town panchayats will pay Rs 6 lakh. The fee structure in other areas will be determined based on local population figures.

The government has also increased fees for all other types of excise licences, a move that is expected to generate an additional Rs 300 crore in annual revenue. Notably, this is the first hike in excise license fees since 2016. Although proposals to increase the fees had been brought up multiple times in the past nine years, they were repeatedly postponed due to protests by liquor sellers.

The state government also released new annual licence fees for various categories — Distillery and brewery Rs 1,50,000 per annum, Craft brewery Rs 25,000 per annum, Fortified wine production Rs 25,000 per annum, Distillery and warehouse Rs 67 lakh per annum and Bar charter at international airports Rs 18.75 lakh per annum.

Welcoming the revised order, B Govindaraja Hegde, general secretary of the Karnataka Liquor Sellers’ Association, said, “The government has provided some relief to liquor sellers. Mainly, it has fulfilled our demand to increase the license period from one year to five years. However, there has been a request to allow payment of fees in instalments, and the government is expected to respond positively to that as well.”

As the new excise year is set to begin on July 1, over 13,000 licence holders across Karnataka will have to renew their licences at the updated rates. (ANI)