Retailers likely to earn 20% profit margin on liquor sales in Andhra Pradesh

The new excise policy mandates the retailers to sell liquor at Maximum Retail Price, and the annual RET slabs are defined based on the population size as per the 2011 census

The new excise policy prescribes a flat 20% profit margin for the retailers, irrespective of the alcohol they sell in Andhra Pradesh.

It is expected that each of these shops can do a business of at least ₹6 crore to ₹10 crore, or even more, in a year. This means, the retailers will earn a minimum of ₹1.2 crore to more than ₹2 crore profit from each shop in a span of one year.

In the G.O. Ms. No. 213 issued by Mukesh Kumar Meena, Principal Secretary (Excise), it was said that the retailers would get a margin of 20% on Indian Made Foreign Liquor (IMFL), Foreign Liquor (FL), Beer, Wine and Ready to Drink varieties.

The new policy mandated the retailers to sell liquor at the Maximum Retail Price (MRP), failing which the government would take coercive action on the violators.

On the other hand, the government fixed the application fee at ₹2 lakh, while levying an annual Retail Excise Tax (RET) of ₹50 lakh to ₹85 lakh for the first year of license period. It would be increased by 10% for the second year.

Once granted licence, the licensee would be permitted to sell liquor for two years.

RET slabs

The RET slabs were defined based on the population size as per the 2011 census.

An RET of ₹50 lakh would be levied if the population size was up to 10,000; ₹55 lakh for a population of more than 10,000 and up to 50,000; ₹65 lakh for a population of 50,000 and up to 5 lakh; and ₹85 lakh for a population of more than 5 lakh.

The RET in respect of shops located in the mandal, nagar panchayat, and municipality, which are within a radius of 5 km from the periphery of a municipal corporation, would be levied on a par with the shop located in that corporation.

Published - October 01, 2024 08:19 pm IST