Exemption for Liquor Licensing Fees

Notification G.S.R (E) exempts certain activities related to liquor licensing from the purview of goods and services tax (GST). Under the Union Territory Goods and Services Tax Act, 2017, the Central Government, based on Council recommendations, declares that liquor licensing transactions by State Governments are not classified as either goods or services.

Specifically, the service of granting liquor licenses, conducted by State Governments as public authorities, will not attract GST, regardless of the form of consideration, such as license fees or application fees. This notification, signed by Ruchi Bisht, Under Secretary to the Government of India, implements the decision made during the 26th Goods and Services Tax council meeting held on March 10, 2018.

The rationale behind this exemption is to align with the council's decision to exempt GST on fees associated with licensing for alcoholic liquor for human consumption. By formalizing this exemption, the government aims to provide clarity and consistency in tax treatment related to liquor licensing across all states and Union Territories.

This measure is expected to streamline administrative procedures and reduce compliance burden for stakeholders involved in the liquor licensing process. It underscores the government's commitment to ensuring fair and equitable tax policies while addressing specific sectoral requirements.

This exemption reflects the ongoing efforts to fine-tune GST regulations and promote ease of doing business in the alcohol industry. Effective immediately upon notification, this exemption brings relief to both government authorities and businesses engaged in liquor licensing activities.