TS tweaks rule, pays no GST on booze licences

With a simple renaming exercise, the TS government has ensured that it will not pay any GST to the Centre on the liquor licence fee. It has simply renamed the licence fee as excise tax, and GST cannot be levied on any tax.

In this, it is a step ahead of the AP government.

The AP government brought in a registration system for the liquor business to avoid GST. Under this, the AP government has drastically reduced the license fee; it collects the difference as “non-refundable registration fee”, which cannot be taxed. In AP, the licence fee for all bars, liquor shops and others now stand at `2 lakh each; the government has to pay GST on this sum for each licence. The TS government, of course, does not need to pay a paise.

The TS government has issued an ordinance amending the Excise Act which said the change of nomenclature would come into force with retrospective affect from October 11, 2016.

This is because the excise year in TS runs from September 1 to August 31. If it had not implemented the name change with retrospective, it would have had to pay GST on the licence fee for two months. With the ordinance, it has avoided even that.

In AP, the excise year is from July 1 — the day GST was implemented — to June 30.

A TS Excise official said that they had not decided on revising the excise tax. There is still two months to decide, he said.