To avoid GST payment, AP tweaks bar licence policy

Hyderabad: To avoid paying Goods and Service Tax to the Central government on bar licence fee, the AP government has introduced registration fee system in the new bar policy, which comes into force from July 1. The bar licence period has been increased from one year to 5 years, subject to payment of non-refundable registration charge and licence fee with an enhancement at 10% annually.

In the new bar policy, the state government did not mention the condition that no bar licence can be granted near schools and temples. The state government has to pay 18% of licence fee to the Central government.

At present, the state government is collecting Rs 10 lakh to Rs 30 lakh, depending on population of that area as licence fee from bars. The state government has to pay 18% of this as GST to the Central government. With this, the state government will lose huge revenue.

To avoid this, the bar licence fee is reduced to Rs 2 lakh to all bars and remaining amount is collected under non-refundable registration charge.

The state government has fixed the annual non-refundable registration charge. In the areas upto 50,000 population, the non-refundable registration charge is Rs 8 lakh and licence fee is Rs 2 lakh; in the areas from 50,001 to 5 lakh population, the registration charge is Rs 18 lakh and licence fee is Rs 2 lakh and in the areas where the population is more than 5 lakhs, the registration fee is Rs 28 lakh and licence fee is Rs 2 lakh.