Liquor License: Procedure for obtaining it in India

Complete Checklist for Obtaining Liquor License in India

16th Jan 2020
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In India, selling liquor is one of the most profitable businesses for the Hotel Sector. It can help to boost the profit margin because of the low labor and high demand. But, at the same time obtaining Liquor License in India, involves a lot of requirements, documents, intricacies and procedures. Further, the State governments are required to keep an eye on the sale and consumption of the alcohol, as every state has a different set of laws and regulation governing liquor.

In legal terms, Liquor License is a permission granted by the State Excise Department to those who want to sell or distribute alcoholic beverages or drinks at a particular place. Every state has a different set of rules and regulations governing liquor, which shall be followed by every individual who wants to sell beer, hard drinks etc.

Types of Liquor License

In some states, there is a need to apply for a specific class of Liquor License. Applying for liquor license depends on the nature of liquor and the kind of business. Following are the different set of liquor licenses available in India-

  1. Beer and Wine Liquor License - The Restaurants and Bar, who are wishing to sell soft liquors like beers and wine go for this type of Liquor License. After this, the owners are not eligible to deal with hard liquors.
  2. Restaurant Liquor License - Any restaurant who wants to serve any alcohol in their premises can go for this type of Liquor License. But it is noteworthy to mention that the percentage of region dealing with alcohol must be limited to forty per cent.
  3. Tavern Liquor License - This type of license is necessary for that business, which though offers food items but makes up for half of their profits out of the alcohol sale.
  4. Brewpub Liquor License – This type of License is required by those who make their wine and beer.

List of Liquor License issued in Delhi

There are various liquor licenses issued by different State Governments. Following is the list of licenses issued by Delhi government –

  1. L–1 License – This License is granted to a company, partnership, society or proprietorship firm, which is running a manufacturing unit. Further, the State Excise Department grants this License. Also, for inviting applications regarding License, the State Excise Department issues Public Notice in leading Newspaper and on the official website.
  2. L–3 License - Bottling Plants or Distilleries requires this type of License. The State Government issues tenders for issuing this type of license.
  3. L–6 License – Retail vendors of Indian Liquor requires this type of License. Further, the State Government grants this license only to selected undertakings.
  4. L–9 License - Any vendor dealing in the Retail sale of the liquor of foreign brand requires this license. Further, an L-1 License holder can only obtain this foreign brand license.
  5. L-10 License - If anyone wants to get a license for the retail sale of both Indian and foreign brands of liquor, then they get it under L-10 License.
  6. P-13 License - Hotels, clubs and restaurants can only obtain this license from the issuing authority. This license acts permission for the hotels, clubs and restaurants to serve foreign liquor in their premises during the hosting of any specific party or function on a particular day.
  7. P-10 License – Government, grants this license to permit serving of liquor at any specific function or party or anywhere in the city except the public parks.
  8. Others - The government grants various other licenses, which includes L-11, L-12, L-15, L-16, L-17, L-18, L-19, L-20, L-21, L-28, L-29, and L-30.

The Ambit of Liquor License

The scope of the laws regulating Liquor License covers -

  1. The businesses involved in selling alcohol
  2. When the liquor can be sold
  3. Where the liquor can be sold
  4. The quantity of the liquor sold
  5. In which container the liquor is sold
  6. Cost for alcohol is served
  7. Type of alcohol to be served
  8. To whom alcohol can be sold
  9. Manufacture and distribution of alcohol

The Need for Liquor License

Liquor License, in essence, is a license by which one gets permission to sell both alcohol and alcoholic beverages. If anyone wants to start a business dealing with manufacturing, sale or distribution of alcohol and alcoholic drinks, he/she needs to apply for a Liquor License. The Business which can apply for liquor license includes businesses ranging from restaurants, private clubs, bars situated in hotels, or other entities.

Liquor Laws in India

In India prevalent liquor license laws include -

  1. As per Article 47 of the Indian Constitution, state governments are directed to improve their public health care and also to prohibit intoxicating drinks and drugs which are injurious to health. It states, "The State shall endeavor to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health." 
  2. As per schedule VII of the Indian Constitution, the subject matter of the state list includes alcohol. Hence, the laws regulating the sale and consumption of liquor vary from state to state.
  3. It is noteworthy to mention that in India, there are five dry States, which include Bihar, Gujarat, Nagaland, Manipur and the union territory Lakshadweep. Dry State means a state where there is a strict ban on the purchase, sale and consumption of the alcohol.
  4. Further, anyone who is above the age of twenty-one can obtain a Liquor License. But, anyone who is below the age of twenty- five can consume neither alcohol nor alcoholic drinks.

Documents Required for Obtaining Liquor License

Every state has prescribed its set of required documents for obtaining a liquor license. Following are the list of documents needed in general for obtaining a liquor license –

  1. Applicant’s identity proof
  2. Applicant’s address proof
  3. Address proof of the premise used
  4. No Objection Certificate from the Fire Department
  5. No Objection Certificate from the Municipal Corporation
  6. An application with the business details
  7. List of the Directors in the case of a company
  8. Memorandum of Association and Articles of Association, in case the applicant is a company.
  9. Copy of the latest Income Tax Return
  10. Photograph of an authorized person
  11. An affidavit declaring that the authorized person doesn’t have any past criminal record under the state act
  12. An affidavit declaring that the authorized person is not a defaulter in paying any dues to any department.

Procedure for Applying for a Liquor License

  1. Every state has a different set of prescribed regulations regarding purchase, sale and consumption of alcohol. Before applying for a liquor license, one must have complete knowledge of the liquor laws prevailing in that state. Liquor laws are laid down by the State Excise Department. Anyone interested in obtaining a liquor license, can inquire about the same on Website of the State Excise Department, personally visiting the license granting authority or by visiting nearby shops.
  2. Before planning to start dealing with the purchase, sale or consumption of liquor, one needs to obtain a liquor license. Further, it is noteworthy to mention that getting a liquor license is a time-consuming process. Thus, planning for obtaining a liquor license is required.
  3. The cost of liquor license differs from State to State as the State laws vary in this matter. Further, one can easily get an idea about the cost of liquor license along with any other information from the website of the State Excise Department.
  4. The applicant is required to file an application form with all the necessary details. Further, he needs to submit the same application form along with the application fee to the concerned authority. 
  5. The applicant is required to mention all the details, including the type of liquor license required. Details include whether the person wants to sale the alcohol in or off the premises, what type of liquor is he planning to serve, i.e. Beer, Wine, Hard Drinks or all three?
  6. The documents which are required to be submitted with the application form vary license to license. But, some of the most common documents which are required to be submitted includes  applicant’s identity and residence proof, premise address proof, Incorporation certificate, No Objection Certificate from Fire department and Municipal Corporation, copy of the latest Income Tax Return and Code Compliance Certificate.
  7. While filing the application form, the applicant must state his background information. Background information includes the age, clean personal record, business experience. Moreover, the applicant is also required to attach documents regarding the information provided.
  8. After the submission of the application form, the authorities will verify and cross-check the credentials submitted and may call for any other details if required.
  9. After the verification, a notice will be posted by the concerned state authority at the proposed location of the applicant's business declaring the name of the applicant and the type of license, etc. It is pertinent to mention that the applicant's proposed location should not be near to any temple, school, hospital and Public Park. 
  10. After the notice is publicly displayed, if within prescribed period objections are raised by the local people, then it will be communicated to the concerned department. It is noteworthy to mention that the applicant has the right to defend himself. In case, no objections, the authority will move further by reviewing the application.

Validity of the Liquor License

Liquor License is renewed annually, and this means that the liquor license renewal price is to be paid at every renewal. Any person who wants to get his license renewed needs to apply for the same before thirty days from the date of expiry along with payment of renewal fees. The application form has to be accompanied with Challan copy, Evidence of the payment of application fee of twenty-five rupees and the liquor license renewal fee fixed by the State Government from time to time.

Revoking of the Liquor License

The State Excise Authorities will revoke the liquor license, on the happening of any of the following incidents –

  1. Liquor served on Dry Days
  2. Liquor served to Minors
  3. Violations of the rules and regulations prescribed by the State Excise department.

Cost of the Liquor License in India

The cost of a liquor license varies from state to state and event to event. Following are the different types of cost incurred in obtaining a liquor license –

  1. Temporary Liquor License Cost – In case the liquor is served at marriage, events or party organized in a small town, where the population is below twenty lakh. In this case, the liquor license will be ten thousand rupees if there are more than 100 members and seven thousand rupees when there are below 100 members.
  2. Cost of Liquor License for a Party in a Private Resort or Flat – According to the Excise Department Rules, the FL-4 license is required for getting liquor in a party organized in a private flat or resort.
  3.  Serving Liquor License Cost in Permit Rooms – This Serving Liquor License cost in Permit Room is rupees five lakh forty-four thousand whereas, for a restaurant and beer shop this license costs rupees one lakh fifty thousand.
  4. Liquor License cost for a State – The applicant is required to submit application fees along with the application form. The fee for the liquor license range from rupees five thousand to rupees fifteen thousand or more. Further, the application fee differed from state to state as per the prevailing state laws.

Guidelines Issued by the Excise Department

These guidelines are issued to ensure that safe and quality liquor is served to the consumers. Further, to keep in control the sale, purchase of the alcohol in India –

  1. Buy alcohol only from the authorized liquor shops.
  2. Any person who is not an Income Tax Payer cannot get the liquor license.
  3. Any liquor bought from any army canteen is meant only for the army personnel’s and not for the general public.
  4. In case the person is travelling from one state to another, he must know the alcohol possession limit of the travelling state.
  5. Any person below the age of 21 is not eligible to but liquor. This limit can vary from state to state.
  6. Do not but liquor from any illegal source.
  7. Do not serve alcohol in any unauthorized premises, as it is an illegal act.
  8. The license holder must display the price of each brand of alcohol served in the liquor shop. Further, the menu rate list showing the price of liquor served is mandatory for the disco, club, restaurants etc.
  9. Lastly, no person, whether male or female below the age of 21, should be employed without remuneration at any place where the liquor is served. This age limit can vary from state to state.
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