The government of Delhi on Thursday assured the Delhi HC that it would not take any Coercive Action against liquor Retailers for non-payment of the license fee under the Delhi Excise Policy 2021-22.
Senior Advocates Rahul Mehra & AM Singhvi, appearing for the Delhi government, furnished before the HC that it will not trigger any coercive action against liquor retailers. After receiving assurance from the Delhi government, Justice Rekha Palli adjourned the matter for 15 November for further hearing.
The assurance was shared verbally when the HC was hearing pleas by over various petitions challenging the government’s decision to impose licence fees w.e.f 1 November 2021.
The plea was furnished by 16 petitioners, who are winning bidders of L-7Z* (refers to zonal license for retail sell of Indian-made as well as overseas liquor) & L-7V* (retail sell of Indian-made liquor & overseas liquor in a zone). The petitioners have pled to declare the state government’s decision to impose liquor fees as illicit.
The pleas also sought to prevent the state government from demanding licence fees or security deposits & also ordering the concerned authorities not to impose or seek license fees from the successful bidders until the state government addressed its obligations under the tender terms & the Delhi Excise policy 2021-2022.
Standing counsel of the State government of Delhi Santosh Kumar Tripathi has also defended the new excise policy.
Further clarifications made by Delhi Government before Delhi HC
Apart from assuring no Coercive Action against Liquor Retailers, the AAP government make the following clarifications before Delhi high court.
The state government has also stated that around 20 mainstream brands rule 80% of the market share in the Indian-made Foreign Liquor (aka IMFL) & 30 brands, including ten prominent brands, have already secured MRP registration in all regards between 29.10.2021 – 10.11.2021. These brands collectively dominate around 28 % of the total market share.
The Delhi government has also confirmed to the court that 10 L1 licenses have applied for registration of around 78 brands as of 11 November & no legit application of brands is pending as of date.
Moreover, the state government has also confirmed the 92 brands of overseas liquor have been examined & awaiting web-based application by the wholesaler & once legitly applied; the process will be completed in not more than two days.
Excise’s conditions regarding L-7Z and L-7V license fee
- Each zone can secure the license in the form viz; L-7Z via e-tendering process and must pay a license fee as recommended by the e-tender.
- This is further exposed to the condition of earnest money deposit (EMD) as well as security deposit incited in the e-tender documents.
- The license fees for the first fiscal year shall only be imposed on a pro-rata basis from the scheduled date of business commencement to the completion of FY 2021-22. If there are nine operative months left in the FY after the scheduled date of business commencement, the licence fees shall be payable only for that amount of time, i.e. nine months estimated on a pro-rata basis.
- The license holders must pay the license fee as per the provisions of Rule 48. According to the said rule, a licensee shall, by the 7th of the month in which they commence the business under the license & thereafter by the 7th of every following month, pay in advance 1/12th of the yearly license fee till the complete fee is paid.
- The 25 per cent security submitted by the license holder shall be adjusted accordingly at the end of the FY. However, the licensee has the right to pay the whole amount due if they so wish.
- If a licensee fails to pay the monthly advance license fee, either wholly or partially, then he/she shall be obligated to pay, on the same due interest @ 12 per cent from the date next following the day on which aforesaid payment turns out due. Moreover, if the payment default continues to exist beyond the 15th day of the month, then an extra penalty @ 0.1%/day on the sum due till the date of payment shall be imposed.
- Apart from that, if the license holder fails to address all the dues (including penalty & interest) by the month’s final day, then the security deposit shall end up nil, and the license shall be re-tendered & cancelled. The license shall be blacklisted & restrained from taking part in any other tendering process for the time span of two years.
- The L-7Z license holder must pay the monthly fee on the pro-rata basis for the zone as a whole, even if he opted to set up less than the required no. of vends in the form of L-7V in his/her zone.
- The license fee might be increased on a yearly basis to be determined by the GOI every year.
The government’s decision to facilitate relaxation to liquor retailers for paying license is undoubtedly an appreciable one. This will allow the retailers to seamlessly initiate their business proceeding without worrying about the cumbersome license fee.
Read our article:Procedure for Obtaining Liquor License in India