Andhra Pradesh Unveils New Liquor Policy To Boost Revenue With Private Retail Sales

The Andhra Pradesh government has notified a new liquor policy, allowing private retailers to sell spirits on the lines of Haryana and others with the state expecting to rake in Rs 5,500 crore revenue. In a complete overhaul of excise policy based on best practices from other states, Andhra Pradesh has decided retail sales of liquor through 3,736 notified private shops across the state. The new policy will take effect from Oct. 12, 2024, as per the notification dated Sept. 30, 2024.

The permission to sell IMFL (Indian-made foreign liquor) and and FL (foreign liquor) will be granted to private persons or entities through a selection process, the notification said.

The period of licence for selling IMFL and FL by shops shall be from Oct. 12, 2024 to Sept. 30, 2026, it added.

Out of the total number of shops to be licensed in 2024-26, as many as 3,396 will be in the open category, while 340 shops will be reserved for allocation to 'Geetha Kulalu' (a toddy tapping community) with a view to empower them and promote equity and social justice.

The selection process for granting licence will be through a draw of lots and an applicant can apply for more than one shop. There shall be no restriction on the number of shop licences a person can hold, it added.

Applicants will have to deposit a non-refundable fee of Rs 2 lakh for each shop.

As per the notification, the retail excise tax ranges from Rs 50 lakh for locality with population of 10,000 to Rs 85 lakh per annum for a municipality or municipal corporation having population above 5 lakh during the fiscal 2024-2025. It will be increased by 10% for 2025-26.

The overall exercise is estimated to result in the state government raking in Rs 5,500 crore.

The RET per annum shall be paid in six equal advance instalments as applicable for each year during the licence period 2024-26.

As per the notification, the retailer margin will be 20% on issue price across all categories of IMFL and FL, including beer, wine and RTDs (ready to drink).

For the premium stores, the notification said, "In order to provide an enhanced and high-end retail experience within the state of Andhra Pradesh, a total of 12 Premium Store Licenses shall be granted as a separate category."

These premium stores shall be strategically located across major municipal corporation cities namely Vijayawada, Visakhapatnam, Rajamahendravaram, Kakinada, Guntur, Nellore, Kurnool, Kadapa, Anantapur or any other city as notified by the state government from time to time, it added.

A cabinet sub-committee of the state government had studied the excise policies of states such as Telangana, Karnataka, Tamil Nadu, Kerala, Rajasthan and Uttar Pradesh and also took extensive feedback from key stakeholders, before framing the latest policy.

It had assessed the performance of the existing policy with respect to public health impact and other critical metrics including revenue generation efficiency, the state government said.