Liquor license fee hike rolled back: Karnataka government cuts excise fee by 50% after vendor protests

The Karnataka government reduced the excise license fee for liquor vendors by 50% after widespread protests. The renewal period has also been extended to five years, easing the burden on wine merchants and boosting vendor support.

Bengaluru: The Karnataka government has yielded to the demands of protesting liquor vendors by reducing the excise license fee by 50%. In a significant move, it has also extended the licence renewal period from one year to five years, providing relief to thousands of vendors across the state.

Government reverses fee hike after strong objections 

On June 15, the state government had issued a draft proposal to double the excise license fee, inviting objections within seven days. The move was met with stiff resistance from liquor vendors, who filed numerous objections and staged protests against the hike.

In response, the government on Monday issued a revised order reducing the fee by half, just a month after the initial proposal.

Symbolic protest and large demonstration forced rethink 

Liquor vendors staged a symbolic protest by boycotting liquor purchases from the Karnataka State Beverages Corporation Limited (KSBL) for a day. This was followed by a massive protest organised by the Federation of Wine Merchants' Association Karnataka at Freedom Park on Saturday.

These coordinated efforts pushed the government to reconsider and issue a revised notification accommodating their key demands.

Revenue expectations trimmed, but gains remain 

A senior official noted, “The excise license fee alone contributed approximately ₹820 crore annually to the treasury. The government had planned to double this amount. However, due to opposition, they have settled for a 50% increase, which is still expected to bring in over ₹400 crore in additional revenue annually.”

License validity extended to five years 

Previously, excise licences had to be renewed annually. With the new order, renewal is now required only once every five years. Additionally, the period from July 1 to June 30 will continue to be considered the ‘Excise Year’, standardising licensing procedures across the state.

Industry leaders welcome the changes 

“We welcome the reduction in licence fees and the opportunity for licence renewal every five years. Efforts will continue to fulfill the remaining demands” — B Govindaraj Hegde, General Secretary, Federation of Wine Merchants' Association