Central Board of Indirect Taxes and Customs (CBIC) has issued a circular on 11th October, 2019 to clarify applicability of GST on license fee charged by the state for grant of liquor licences to vendors.
CBIC in its earlier notification dated 30th September, 2019 clarified that service by way of grant alcoholic liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called by State Government is neither a supply of goods nor a supply of service. Therefore, GST is not leviable on license fee and application fee payable for alcoholic liquor.
Further, it has been clarified that this special dispensation applies only to supply of service by way of grant of liquor licenses by the State Governments as an agreement between the Centre and States. This will not apply in relation to grant of other licenses and privileges for a fee in other situations, where GST is payable.
Click here to read circular.
