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What is Liquor License?

A Liquor license is a permit given by the state excise department to those who want to sell alcoholic beverages at a certain place. Each state government has laid down certain rules and regulations for the licenses which should be followed by every person who wants to sell hard drinks, beer or wine. This license is issued only after close inspection and examination of all the details of the License holder. Selling liquor without a license is an illegal act and it is an offence under various state laws.

Types of Liquor License

  1. Beer and wine liquor license – License for those who want to sell only beer and wine to the customers. They are not allowed to sell liquor or distilled spirits. These types of licenses are given to small restaurants.
  2. Restaurant liquor License – License for those who want to sell beer, wine and liquor in their restaurant premises to their customers. It is also called “all-liquor license”. These licenses are given to those restaurants whose business mainly depends upon selling of food items and only certain percentage of their sales comes from alcohol.
  3. Tavern liquor license – License for those who want to sell beer, wine and liquor and their half of the business comes from selling alcohol and half from selling of food items. This license is operative in some states and in some states; no such separate license exists as it totally depends upon the govt. ruling that state as well as their local regulations. State govt. may ask you to apply for this license, if you are serving food items and half of your sales are from selling alcohol.
  4. Brewpub Liquor license – License for those who make their own beer and wine. In some states you need a separate license for it to serve it to the customers.

Liquor laws in India

  1. A person having the age of 21 years or above only can obtain the liquor license in India. Age for obtaining liquor license differs from state to state. For Ex – In Delhi, the age of obtaining liquor license is 25 years. The process of obtaining liquor license takes time and it is challenging as well.
  2. The subject of “alcohol” is included in the state list under the seventh schedule of the constitution of India. Therefore, the law which governs the sale and consumption of alcohol differ from state to state.
  3. Under Article 47, the constitution of India clearly gives direction to the states to improve public health and prohibits the intoxicated drinks and drugs which are injurious to health.
  4. Liquor is banned in some states such as Gujarat, Bihar, Manipur, Nagaland and the union territory of Lakshadweep. Sale, purchase and consumption of alcohol in these states is a punishable offence.

Why liquor license required?

  1. Manufacturing, selling and distributing intoxicating liquor without a state license is an illegal act and it is an offence under various state laws.
  2. Alcohol has been consumed by every class of society whether it is rich, middle or a poor class. Peoples are influenced by easy availability and weak implementation of laws. To control that, state govt. imposed some rules and regulations on liquor licenses. Before issuing liquor license to any person, there should be a proper check on the details of the person applying for liquor license. Proper inspection leads to reduction in the wrongful sale of liquor licenses.
  3. There is a need of strong rules & regulations to maintain the health, peace & order in the country. Therefore, Liquor license is necessary.

How to Get a Liquor License? - Process of Liquor License in India

  • FIRST STEP – Every state has its own rules and regulations related to sale, purchase, and consumption of alcohol and it differs from state to state. A person applying for a liquor license must have full knowledge about Liquor laws of his state laid down by state excise department. The person can enquire about the rules and regulations from the following sources –
    • Website of state excise department.
    • Nearby liquor shops
    • Physically going to License granting authority.
  • How to Get a Liquor License? - Process of Liquor License in India
  • SECOND STEP – Before starting a shop, restaurant, bar or a hotel serving alcohol, you need to apply for a liquor license. It is not easy to get a license as it is a time consuming process. Therefore, planning should be done well in advance for it.
  • THIRD STEP – The cost of the liquor license may differ from state to state. In some states, the cost of the license is quiet high and in some states, it is low. Almost every state has its own website of state excise department where you can get all the information about the cost of the license as well as other information related to it. Every area has a limit to the grant of liquor licenses. Therefore, sometimes you have to buy liquor licenses from the existing bar, restaurants etc. which may cost you a bit higher as compared to the normal cost.
  • FOURTH STEP – The applicant must fill all the necessary information in the application form accurately and submit it to the concerned state authority with the application fee.
  • FIFTH STEP – The applicant must mention all the details about the type of license required such as
    • Whether you want to sell alcohol on the premises (alcohol sold & consumed inside the premises) or off the premises (alcohol consumed outside the premises)
    • What type of alcohol is he planning to serve i.e. wine, beer or hard drinks or all the three?
  • SIXTH STEP – The applicant must submit valid documents with the application form which may differ from license to license. Identity & residence proof of the applicant, address proof of the premises are the most common documents which an applicant has to submit with the application form. Other documents includes certificate of incorporation, Code compliance certificate, NOC from Municipal Corporation & fire department, Copy of latest IT return etc.
  • SEVENTH STEP – While filling the application form, the applicant must mention his background information such as age, business experience, clean personal record and attach the required documents with it.
  • EIGHTH STEP – When the application is submitted with the required documents & fees to the concerned state authority, the state authority will verify the applicant’s information that whether it is correct or not and if required, state authority may ask for additional details.
  • NINTH STEP – After verification process, a public notice will be released by the concerned state authority and posted at the location for display which includes your name & type of license you are applying for. Your proposed location should have some distance from schools, hospitals, places of worship and near by parks.
  • TENTH STEP –The notice must be publically displayed at your business location for a prescribed period of time. In this period of time, if local people or any community from the area has an objection, than the applicant has the full right to defend his proposal. If there is no objection, the state authority will proceed further in reviewing the application.

Renewal of License

If you want to maintain your Liquor license, you have to renew your license yearly by paying a certain amount of fees. You may get reduction in the renewal fees if you will maintain a good position in your area throughout the year.

Revoking of License

Your license can be revoked if you will not follow the rules & regulations of the state excise authority.

License can be revoked –

  1. If you will sell alcohol on dry days
  2. If you will sell alcohol to minors
  3. If you will not follow the rules and regulations of the state authority.

Documents required for registration

  1. Identify proof of the applicant
  2. Address proof of the applicant
  3. Address proof of the premises
  4. NOC from the Municipal Corporation
  5. NOC from the fire department
  6. Application with business details
  7. List of directors in case of a company
  8. Copy of Latest IT Return
  9. MOA and AOA, if the applicant is a company
  10. Photograph of an authorized person
  11. Authorized person’s affidavit stating that he has no criminal record and he has not done any offence which is punishable under the state act.
  12. Affidavit which states that he is not a defaulter in paying any dues to the department.

Types of Licenses

Different types of Licenses are issued by each state government. An individual or company can seek the grant of following licenses:

LICENSE NAME PURPOSE PROCEDURE GRANTED TO
L1 It is a Liquor license for the wholesale supply of Indian liquor. The main job of the L1 license holder is to supply liquor to the license holders of L-6, L-7, L-9, L-10 etc. The govt. invites applications by giving a public notice in a leading newspaper and on the official website of the state excise department. It is granted to company or society or a partnership firm or proprietorship firm having licensed manufacturing units only.
L3/L5 L3 is a liquor license granted to permit the hotels to serve foreign liquors to the residents staying in their rooms whereas L5 license is granted as a separate license to serve liquor in exclusive bars or restaurants which is in the premises of the hotel. The application is submitted to the Excise commissioner and the license is granted after inspecting and examining has been done by the committee of license granting authority. It is granted only to hotels which are holding star classification and also having the approval from Tourism Department of Govt. of India.
L6 It is a liquor license issued to the retail vendors of Indian liquor or beer. For ex- License given to Liquor shops For premises of such liquor shops, proposals are invited by selected and approved corporations. The Excise commissioner grants the license only after looking into the suitability of such premises. It is mainly granted to selected undertakings of state govt.
L19 This License is granted to a club registered with the registrar of firms or cooperative societies for service of foreign liquor to its members. Any eligible club can apply for a license but in accordance with the terms & conditions prescribed by the state authority. It is only granted to the clubs registered with the registrar of firms or cooperative societies.
L49 This License is easily granted to a person by paying particular fees for service of liquor in any party, marriage, function etc. at specific premises anywhere in a state. Any person arranging a party, function, marriage etc. can apply for the permission of this license following the terms & conditions prescribed by the authority. It is granted only after excluding the public parks subject to the following conditions -1) The area should be away from public view. 2) Liquor should be served to adults above 21 years of age in most of the states, the age is 21. (Differ from state to state) 3) Liquor should be obtained from authorized source and not from illegal sources.

There are other licenses too i.e. L-7, L-9, L-10 etc. for which you can get the information on the excise department website of your state. You can check the cost of liquor license on the website too which may differ from state to state.

Guidelines by the Excise Department

The Excise department has issued some guidelines to provide safe & quality liquor to the consumers and to keep control on the sale of liquor in India –

  1. Buy liquor from authorized liquor shops only.
  2. License cannot be granted to a person who is not an income tax payer.
  3. The liquor bought from army canteens is meant for army personnel only and not for the general public.
  4. If a person is travelling to some other state in India, he should know the possession limit of liquor of that travelling state. For ex- If you are travelling to Delhi, one should not possess more than one unsealed liquor bottle of 750 ml. Limit differs from state to state.
  5. Do not buy liquor, if you are below 21 years of age. Age limit differs from state to state.
  6. Do not service liquor from illegal sources.
  7. Do not service liquor at unlicensed premises. It is an illegal act.
  8. The License holder should display a board on his shop showing the price of each brand of liquor in case of liquor shop, Menu rate list showing all liquor brand rates in a menu book in case of a restaurant, hotel, bar or a disco is mandatory.
  9. No male person under the age of 21 years or a female should be employed with or without remuneration in the premises in which liquor or intoxicating drug is consumed by the public. Age limit differs from state to state.

Conclusion

India is amongst the biggest manufacturer of liquor around the world. The process to get a liquor license is not an easy job. It is a long and a time consuming process. If you take the case of Delhi, 2 Years ago, Chief Minister of Delhi made the entire process of granting liquor licenses online and made the job easier for the persons who want to apply for a liquor licenses in Delhi. The process to get a liquor license has many obstacles. It requires a lot of capital but it is a profitable business as it has low labour cost and high profit margins.

FAQ’S Related to Liquor License

What is the minimum age for getting a Liquor license?

The minimum age for getting a Liquor license is 21 years in most of the states in India but it differs from state to state. Ex – Minimum age for getting a liquor license in Delhi is 25 Years.

Are Liquor License cost is same for every state?

No, Liquor License cost is not same for every state. It differs from state to state as it comes under State excise department.

I am from Gujarat, how can I get a Liquor License?

You cannot apply for a liquor license in Gujarat as Liquor is banned in Gujarat. It is also banned in Bihar, Nagaland and union territory of Lakshadweep.

From where I can get all the information about UP state excise liquor laws, required documentation and licenses information? Any link or website?

Almost every state has its own website which contains all information about liquor licenses, required documentation and liquor laws. You will get all information related to liquor licenses for UP state on http://www.upexcise.in

For how many years the liquor license has been issued?

The term of liquor license is 1-3 years but it depends on your state and local regulations.