Telangana notifies liquor shop allotment, hikes application fee by 50% with Rs 6500 cr revenue target

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The Telangana government on Wednesday released its new notification for the allotment of retail liquor (A4) shops across the state.

The fresh cycle will begin on December 1, 2025, and continue until November 30, 2027, with licences valid for a two-year term.

The total number of liquor outlets has been fixed at 2,620, the same as the current cycle, while the licence period too remains unchanged at two years, Deccan Chronicle reported.

According to the report, the most significant change in the new notification is the sharp hike in the non-refundable application fee. Applicants will now have to pay Rs 3 lakh per shop, as compared to Rs 2 lakh earlier, which means a 50 per cent increase.

The government expects this higher fee, along with licence charges, to fetch close to Rs 6,500 crore in revenue over the next cycle.

During the previous allotment in 2023, the state had earned more than Rs 1,350 crore from application fees and about Rs 3,500 crore from licences, according to a report by Telangana Today.

The allotment will be done through a draw of lots, which will be overseen by district collectors. Applicants are allowed to submit multiple entries, provided they pay the prescribed fee for each application.

The process is open to individuals, partnership firms and companies.

Reservation quotas and licence slabs

The government has also introduced reservations for certain categories. Out of the total outlets, 15 per cent have been reserved for the Goud community, while 10 per cent are set aside for Scheduled Castes and 5 per cent for Scheduled Tribes.

The Retail Shop Excise Tax (RSET) has been divided into six slabs depending on the size of the population in the area.

The lowest tax slab is Rs 50 lakh annually for villages with fewer than 5,000 residents, while the highest is Rs 1.1 crore for cities with populations above 20 lakh.

The intermediate slabs are Rs 55 lakh for areas with 5,000-50,000 people, Rs 60 lakh for 50,000-1 lakh, Rs 65 lakh for 1-5 lakh, and Rs 85 lakh for towns with 5-20 lakh residents.Also, each shop will have to pay a Special Retail Excise Tax (SRET) of Rs 5 lakh per year.

License holders are allowed to clear their payments in six instalments, but they must also provide a bank guarantee equal to 25 per cent of the annual RSET.

Based on the minimum slab of Rs 50 lakh per shop, the state government is confident of earning at least Rs 1,400 crore from RSET alone, in addition to nearly Rs 78.6 crore from application fees.

Walk-in stores, margins and compliance rules

The notification has also continued the option of walk-in stores. Shop owners can convert their outlets into walk-in facilities by paying an additional Rs 5 lakh annually. Such stores will also be allowed to sell liquor-related accessories like glasses, corkscrews, trays and ice buckets.

The timings of shops have been retained, with outlets in GHMC areas can remain open from 10 am to 11 pm, while those outside GHMC limits can operate from 10 am to 10 pm.

Liquor must be sold strictly at the printed retail price, with margins fixed at 27 per cent for regular IMFL, 20 per cent for premium IMFL and foreign liquor, and 20 per cent for beer.

To ensure transparency, every shop must have CCTV cameras connected to the Excise Department’s central control room. Outlets are also required to maintain clean premises and adequate parking facilities for customers.

If any outlet remains unallocated even after the lottery process, the Excise Department or Telangana Beverages Corporation will be empowered to run those shops directly or re-notify them for allotment.