After backlash, Karnataka govt limits hike in liquor license fee to 50%

Bengaluru: The state government, which in a draft notification had proposed an increase in license fee for distilleries, breweries, and other alcohol selling establishments by as much as 100 per cent has now limited the hike in license fee to 50 per cent. The change in license fee will come into effect from July 1, 2025.

The draft notification, which was released on May 15, had sparked widespread objections from stakeholders. The liquor dealers had also met the Chief Minister and the officials from the finance department, urging them to reconsider the decision.

Following the objections, the hike in prices has been limited to 50 per cent in the final notification.

“We would not have been able to run business if the hike was 100 per cent. Though 50 per cent increase will also hit our business, we can somehow manage,” said Karunakar Hegde, Bengaluru divisional president, Federation of Wine Merchants Association, Karnataka.

According to the final notification, the annual license fee for hotel bars in large city corporations (population over 20 lakhs) is now pegged at Rs 12.75 lakhs per year from the previous fees of Rs 8.5 lakhs. Similarly, license fees are proposed to be increased by 50 per cent for CL4 (clubs) CL2 (retail shops), and CL9 (bars and restaurants). The license fee for distilleries and warehouses has gone up to Rs 67.5 lakhs from Rs 45 lakhs. Breweries will also face a similar increase with license fees rising from Rs 27 lakhs to Rs 40.5 lakhs.

The notification has also changed the regulatory inspection period for alcohol selling establishments from one year to five years. This move would help reduce corruption, Hegde opined.

“Every year, during the inspections, a few officials tend to demand bribes and an increase in the inspection period is a welcome move as it will bring down corruption,” Hegde said.