Perhaps you'd like to sell alcohol in India but aren't sure how to go about it. Luckily for you, we've compiled a comprehensive guide on starting a liquor business. Everything from the different types of liquor licences, the costs involved, to the documents required for the procurement process will be covered in this article.
A Liquor License granted by a state’s excise department allows licensed individuals to manufacture, transport, and sell alcoholic beverages within the boundaries of a state. Every business that sells alcoholic beverages, from liquor stores to restaurants, must apply for a liquor license, either online or in person. Even the online selling of liquor in India requires a liquor licence.
According to the VII Schedule of the Constitution, the sale, distribution, and manufacturing of liquor are under the state list. As a result, state governments have complete control over the alcohol-related laws and guidelines that are enforced inside their various jurisdictions. As a result, different states have different rules regarding the sale and manufacture of liquor.
The predominant laws and rules that regulate the sale and consumption of alcohol in India are as follows:
- Article 47 of the Constitution
- Licencing Act, 2003
- Delhi Excise Act, 2009 and Excise Rules, 2010
- Punjab Excise Act,1914
- Uttar Pradesh Excise Act,1910
- Bengal Excise Act of 1909
- Goa Excise Duty Act, 1964
- Bombay Prohibition Act of 1949
- Karnataka Excise Act, 1965
- Tamil Nadu Liquor Rules, 1981
Keep in mind that engaging in a liquor business without a Liquor License can lead to major legal troubles and heavy fines. Hence, it is always best to stay on the right side of the law. Get in touch with our team to know more about how to lawfully commence and operate a liquor business.
What Does the Liquor Licence Regulate?
The excise department seeks to regulate the following activities within a state while granting a Liquor License:
- Businesses authorised to sell and market alcohol
- When and where establishments shall sell alcohol
- Quantity of alcohol that may be sold at a time
- The charge set for the purchase of alcohol
- Types of liquor that may be sold
- Who the alcohol may be sold to
- Businesses allowed to manufacture, transport, distribute, and possess alcohol.
The Different Types of Liquor License Available in India
- Beer and Wine Licence – For those establishments who wish to sell only mild liquors such as beer and wine. Bear in mind that such businesses should not deal in hard liquor
- Restaurant Liquor Licence – For restaurants that wish to serve alcohol. This licence applies only to those establishments that earn less than 40% of their total income from the sale of liquor
- Tavern Licence – For businesses whose liquor sales make up more than half of their profits
- Brewpub Licence – For establishments that brew their own wine and beer.
- Temporary Licence – To serve liquor at a party or event with less than 20 lakh people in attendance
- FL-4 Licence – For people who wish to serve alcohol at a private party inside a private resort or apartment
- L1 – Necessary for wholesale supply of Indian liquor
- L3 – Allows hotels to serve foreign liquors to guests in their hotel rooms
- L5 – Allows hotels to serve liquor in bars or restaurants within hotel premises
- L6 – Suitable for retail vendors of beers and Indian liquors
- L19 – Allows clubs to serve foreign alcohol.
How Can People Apply for a Liquor Licence in India?
Since every state has different liquor laws, you must consult an expert before proceeding to avoid legal hassles later. Nevertheless, here is a look at the general process involved in obtaining a liquor licence in India.
- First and foremost, visit the state excise department’s official website to get an idea of the process. You can also visit their physical office to gain some insight into what is expected
- Once you have an idea regarding the process involved, decide on what type of licence you need
- Next, collect the required documents to start the application process.
- Download the application form for your desired type of licence from the state excise department’s website
- Duly fill the form with the required details and attach supporting documents wherever necessary
- Some of the details you will need to mention include details regarding your place of business, personal information, and mention the types of liquor you wish to sell
- Submit the filled out form to the concerned authority and pay the applicable application fee
- The authority will then verify all the details provided. They may also visit your business premises to check whether everything is in order. In case they find that something is amiss, they may ask for additional supporting documents, which you must provide
- Once the verification process is complete, they will post a notice regarding your request for a liquor licence on your business premises. This is to notify the locals about your new business. If they wish to raise objections, they may do so within a specified period, and you will then have to justify why your business will not be a hindrance to them
- If no one raises any successful objection, the authority will grant you a liquor licence, and you may begin operations.
Cost of a Liquor Licence Within India
Since liquor laws vary from state to state, the cost of obtaining a licence also varies depending on your place of business. Moreover, the cost of obtaining a licence also depends on the type of licence you want and the size and nature of your business. The list below is a breakdown of the average cost of a liquor licence in India:
- Temporary Licence – To serve liquor at a party or event in a town with less than 20 lakh people, you will have to pay either:
- ₹7,000 if you wish to serve liquor to less than 100 people
- ₹10,000 if you wish to serve liquor to more than 100 people
- FL-4 Licence – Approximately ₹13,000.
- Serving Liquor in Rooms – To serve liquor in a restaurant, you will have to pay either:
- ₹5,00,000 for serving in hotel rooms
- ₹1,50,000 for serving in a beer shop or restaurant
- State Liquor Licence – Anywhere between ₹5000 and ₹15,000.
Documents Required for Obtaining a Liquor Licence
- Applicant’s identity proof and address proof
- Address proof of the business premises
- NOC from the state fire department
- NOC from the concerned municipal corporation
- Duly filled application form
- MoA and AoA of companies, if applicable
- Latest ITR copy
- Applicant’s passport size photograph
- Affidavit regarding lack of criminal records in the applicant’s name
- Affidavit declaring the applicant has no pending dues in their name.
How VakilSearch Can Assist
Our team of legal experts will be able to provide you with the guidance you require to start a successful liquor business. Here’s how:
- We can help identify the type of licences and registrations such as (ex: fssai licence registration) that you need to start your venture
- Our lawyers can help obtain and organize all the documentation necessary
- Additionally, we also provide services related to incorporation, enabling you to register your business quickly and efficiently
- Most importantly, our team can help you procure all other ancillary licences and tax registrations you will need to make your business compliant.