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[F. No. 354/136/2019- TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 30th September, 2019
Notification No. 25/2019 - Union Territory Tax (Rate): Seeks to notify the grant of alcoholic liquor license neither a supply of goods nor a supply of service as per Section 21(i) of UTGST Act read with Section 7(2) of CGST Act, 2017.
GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R......(E).- In exercise of the powers conferred by clause (i) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) read with sub-section (2) of section 7 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council hereby notifies that the following activities or transactions undertaken by the State Governments in which they are engaged as public authorities, shall be treated neither as a supply of goods nor a supply of service, namely:-
“Service by way of grant of liquor license, against consideration in the form of license fee or application fee or by whatever name it is called.”
(Ruchi Bisht)
Under Secretary to the
Government of India
Explanation.- This notification is being issued to implement the recommendation of the 26th Goods and Services Tax council meeting held on the 10th March, 2018 that no GST shall be leviable on license fee and application fee, by whatever name it is called, payable for alcoholic liquor for human consumption.
📚 Frequently Asked Questions (FAQs): Notification No. 25/2019 - Union Territory Tax (Rate)
Q1: What is Notification No. 25/2019 - Union Territory Tax (Rate)?
Answer:
It clarifies that liquor licence fees paid to State Government are not subject to GST, as they are neither goods nor services.
Q2: Is GST charged on liquor licence fees now?
Answer:
❌ No GST is applicable.
Q3: Does this apply to application fees also?
Answer:
Yes. Both:
Licence fees
Application/renewal fees
are exempt.
Q4: Who gets benefit of this notification?
Answer:
Liquor shops
Bars
Restaurants
Hotels
Event caterers
Wholesale distributors
Q5: Can we claim Input Tax Credit (ITC) on licence fees?
Answer:
No. Since GST is not charged, no ITC available.
Q6: Is liquor itself taxable under GST?
Answer:
No. Alcoholic liquor for human consumption is outside GST. State Excise applies instead.
Q7: Does this apply across all Union Territories?
Answer:
Yes. It applies in UTGST jurisdictions like:
Chandigarh
Andaman & Nicobar
Lakshadweep
Dadra & Nagar Haveli and Daman & Diu
Q8: If government charges “processing fee”, is GST applicable?
Answer:
If it is related to liquor licence grant, it is covered under exemption.
Q9: What if GST was wrongly paid earlier?
Answer:
You may:
Adjust in returns OR
Apply for refund
Consult Finodha GST experts for help.
Q10: Does restaurant GST on food change because of this?
Answer:
No. Food supply GST remains applicable. Only licence fee is exempt.
Q11: Is reverse charge applicable?
Answer:
No. Since it’s not treated as supply, RCM also not applicable.
Q12: Do we still need GST registration?
Answer:
Yes, if you:
Sell food
Provide catering
Provide taxable services
👉 Register here: https://finodha.in/online-gst-registration/
Q13: Is this exemption permanent?
Answer:
Yes, until government amends or withdraws notification.
Q14: Does this apply to private agencies?
Answer:
No. Only State Government licensing activity is covered.
Q15: How to reflect this in GST returns?
Answer:
Simply do not include licence fee in taxable value.
🚀 Conclusion
Notification No. 25/2019 - Union Territory Tax (Rate) is a big relief for the hospitality and liquor industry. It removes unnecessary GST burden and simplifies compliance.
Download PDF: Notification No. 25/2019 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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