AP Government Ends Extra Tax on Bars, Brings Major Relief to Owners
In a significant policy shift, the Andhra Pradesh government has completely abolished the additional retail excise tax imposed on bars across the state. This decision brings immediate relief to bar owners who have long struggled with higher operational costs compared to retail liquor shops.
Policy Changes Take Immediate Effect
The new guidelines came into force on January 13, according to revenue principal secretary Mukesh Kumar Meena. The government formally withdrew the special ARET that had been in place since November 2019 through official orders issued this week.
This marks a complete reversal of the previous excise policy that created differential pricing for the same liquor supplied to retail shops and bars. Under the new framework, no additional tax will be levied on Indian Made Foreign Liquor and Foreign Liquor supplied to bars from APSBCL depots.
Creating Level Playing Field for Bar Operators
For years, bars received liquor at higher rates than retail shops, creating competitive disadvantages and financial stress for operators. The restoration of price parity addresses this long-standing anomaly in the state's excise system.
The government has directed officials to issue fresh notifications under the Excise Act and approved amendments to the 2025 bar licence conditions to implement the revised policy framework. These measures aim to bring uniformity and transparency to liquor pricing throughout Andhra Pradesh.
Expected Benefits for Hospitality Sector
Bar owners anticipate significantly reduced operational costs following the tax removal. The AP Star Hotels Association has welcomed what it calls "visionary excise policy decisions" favorable to the hotel and tourism sector.
The association believes the policy changes will:
- Ensure genuine price parity between shops and bars
- Enhance transparency in liquor pricing
- Spur hotel investments across the state
- Generate employment opportunities
- Strengthen state revenues through balanced taxation
With controlled maximum retail price revisions and a more balanced revenue model, industry representatives expect improved margins and better business viability for bar operators. The director of excise, commissioner of distilleries, and APSBCL officials have been entrusted with implementing the revised policy effectively.
Trade circles view this policy correction as a major relief that rationalizes Andhra Pradesh's excise framework while supporting the hospitality industry's growth ambitions.
