An innovative Telangana government was swift off the blocks to stave off revenue loss on its thousand-crore liquor business before GST rollout to keep coffers brimming. When the nation was awaiting the launch of the new tax regime, the state government issued an ordinance on June 29, changing the nomenclature of taxes and fees. The ordinance renamed Licence Fee on Wine Shops, Bars and Distilleries to Excise Tax, will save the exchequer of over Rs 900 crore.
Though, the Centre exempted alcohol for human consumption from GST purview, it included fees, transport, packaging and storage in the new tax system.
Telangana has an income of over Rs 10,000 crore in form of licence fee. As per GST norms, it has to cough up Rs 1800 crore to the Centre, of which it gets back Rs 900 crore as share. The state government held a series of meetings with chartered accountants and legal experts, who suggest a change in nomenclature to get an exemption.
The state government issued an ordinance and sent it to Governor for approval.Before launch the GST on June 30, the ordinance received the approval of the governor.Excise department collects `32 lakh-“1 crore as licence fee from wine shops, based on the population of area where they operate. For bars, licence fee was fixed at `40 lakh. The state government also collects this fee from distilleries and breweries in the state, mopping up big revenue.