Liquor License

Liquor License

How much does Liquor License cost in India?

calendar18 Jun, 2020
timeReading Time: 5 Minutes
liquor license cost

A liquor license is a type of permit given by the State Excise Department to the people who wants to sell alcoholic beverages at the certain place. Each state government has laid down various rules and regulations for granting the licenses, which has to be followed by the person in the liquor business and wants to sell hard drinks.

The license is issued only after the examination and inspection of the details mentioned by the license holder. The license is granted after the prescribed liquor license cost is paid by the license holder. Selling liquor without a liquor license is an illegal act and is a punishable offense under the eyes of various state laws.

New Liquor License Cost policy released by Uttar Pradesh

The Uttar Pradesh government has approved the states 2020-21 excise policy, in which it has increased the liquor license cost fee on country-made liquor by 10%, and beer by 15% and also foreign liquor by 20%. The decision has taken by the Cabinet, and the hike in license fee is likely to increase in prices with effect from 1st April 2020.

Another highlight of the policy is that from now onwards, beer shops can also sell wines along with the Indian made foreign liquor (IMFL) shops in Uttar Pradesh. The state government has made this simple and transparent excise policy that would remove cartels. The renewal of licenses will be done by way of e-lottery. Under this new policy, one person will be allowed to have only two (liquor) shops in the state. 

Some Highlights of the new policy of liquor license cost

  • The new policy aims at the higher excise duty realization due to ease of doing business through decentralization of power, rationalization of duty structure, availability of brands, use of modern technologies for quality assurance, and high-end quality products all over the year.  
  • The new excise policy also provides a special license for serving liquor on special trains and cruises, which was free earlier. Under the new norms, licenses will also be given to airport lounges and hotels located outside airports.
  • The new policy has fixed an annual license fee for hotels, restaurants, and clubs in category-1 cities for serving liquor at Rs 10 lakh, i.e., in Gautam Buddha Nagar, Ghaziabad, Municipal Corporation of Kanpur Nagar, Prayagraj, Lucknow, and Varanasi). 
  • The license fee for category-2 cities has been fixed at Rs 7.5 lakh. This includes the municipal corporation areas of Gorakhpur, Mathura, Ayodhya, Aligarh, Bareilly, Firozabad, Meerut, Jhansi, Moradabad, and Saharanpur.
  • While the license fee for category-3 cities is Rs 5 lakh, for category-4 cities, it is Rs 2.5 lakh.
  • Through these measures, the government has also set a target of Rs 31,600 crore in excise collection for FY21. The government has announced that bar codes will be placed on all liquor bottles so that consumers can check the authenticity of the labeled contents.

Importance of liquor license cost in Delhi

The Delhi Court states that there is no service tax of any kind to be levied on liquor license costs, in accordance with the GST Council’s decision. Every state in India has its own laws for alcohol and the requirements concerning liquor license permits.

For instance, the sale and distribution of liquor in Delhi is governed by the Delhi Liquor License Rules, 1976, which mention all different kinds of licenses that one would need in order to be allowed to serve liquor in a city. It further states other rules to ensure quality liquor as well as the safety of the consumers.

However, each state has its very own local authority, which looks into the authorization of licenses. This authority is known as an Alcoholic Beverage Control Agency (ABC Agency[1]), whose job is to check on and regulate all sales and distribution of liquors.

It also has a specific license quota dictating the possible number of restaurants and other places selling liquor within a certain city during a specific time. There may be no licenses available for sale at all sometimes; hence, it leads to problem in acquiring the liquor permit or a restaurant permit.

Read our article:Procedure for Obtaining Liquor License in India

What is Liquor License Cost?

The cost of obtaining liquor license differs from state to state. Following are the various types of cost that are paid during the process of obtaining liquor license:

Liquor License Cost

Temporary Liquor License Cost

  • The temporary club license or party permit fees for bigger parties (more than 100 people) is rupees 15,000. But smaller parties (below 100 people) is rupees 10,000.
  • For temporary club licenses for liquor parties in smaller towns, such as Navi Mumbai, where the population is below 20 lakh, the mandatory license will cost Rs10,000 for above 100 members and Rs7,000 for below 100 members.

Liquor License Cost for Private Party in a Resort or a Flat

  • As per excise department rules, the FL-4 license is needed to host a private liquor party in a flat or at a resort, which presently costs Rs 13,000 across cities in the state.
  • Consumers must have the license even if they are drinking with friends in an apartment or a house party organizer, which is booked for illegal possession of liquor. While only if few friends are together, the consumer must at least have a daily drinking permit.

Liquor License Cost in Permit Rooms

  • License fee for permit rooms is rupees 544,000, and that for beer shops is rupees 150,000.

Liquor License Cost For a State:

  • The candidate has required to submit application expenses alongside the application form. The charge for the alcohol permit runs from Rs 5,000 to Rs 15,000 or more. Further, the application charge contrasted from state to state according to predominant state laws.

Why Cost or Investment Required?

The question arises of what can be a cost to open a liquor shop. It is wise to start a business only if there is more return than the capital investment plus direct and indirect expenses, especially for a long run. See. Firstly, to have liquor license, one needs to deposit application fee and then submit liquor license costs. 

This fee can be in few thousand (Rs. 5,000 to Rs. 15,000 or more), which can vary with the type of license. Other than this, one also requires a licensed premises to stock of liquor and staff to serve or can sell liquor. Before starting, one needs to calculate the initial cost of starting a liquor shop, which approximately cost from Rs. 50 lakh to Rs. 60 lakh depending on the location and also various other factors.

The cost of obtaining the alcohol license will shift. In some cases, one will required to pay in thousands for the application fee and plus taxes. The liquor license cost could convert into the huge number of profits.

There are normally different types of licenses for various sorts of organizations – for example, opening an alcohol store will need a different kind of license than only running a bar. Subsequently, as a major aspect of the application, one must compose a clear portrayal of the sort of business that will be running. It requires ought to incorporate information on whether the license holder means to offer liquor for consumption on the premises or on the rate of the aggregate income originates from the sale of liquor. This is vital as a few sorts of liquor require a different liquor license in comparison to others.


The Licensing Act 2003 says that one requires a permit to sell alcohol in India. Even if one wants to give away alcohol for free, he required to have this permit. It is because the mere act of giving alcohol away for free is seen as an incentive offered thee customers to purchase from you- one that is a part of your pricing structure. 

Selling liquor in a restaurant is an absolutely nice way to make benefits given that alcohol, in general, has low labor costs and high-benefit margins. So, if you’re all set to open up a restaurant or a bar, a liquor license is one of the most prime things you need to get as well as plan for in advance and know about the liquor license cost.

Read our article: How to obtain Liquor License in Mumbai

Liquor License

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