Liquor Tax Cuts: In a significant policy move aimed at strengthening Gujarat International Finance Tec-City (GIFT City) as a global financial destination, the Gujarat government has announced major tax relief on foreign liquor served within the smart city.
The state government has reduced the Value Added Tax (VAT) on foreign liquor from 65% to 25% and abolished the special fee charged on every 30 ml serving. The decision is expected to lower liquor prices substantially in GIFT City’s licensed hotels and restaurants while supporting the hospitality and business ecosystem.
Major Tax Relief Announced for Liquor Tax
According to government notifications, two important changes have been introduced:
- VAT on foreign liquor reduced from 65% to 25%
- Special fee of around ₹240 per 30 ml serving abolished
- Relief applicable only to approved Wine & Dine facilities operating in GIFT City
- Benefits available through licensed FL-III establishments within the notified area
Liquor Prices Expected to Drop Significantly
Earlier, high taxation made alcoholic beverages in GIFT City considerably more expensive than those in metropolitan cities.
For example:
- A drink priced at ₹200 earlier cost approximately ₹330 after 65% VAT.
- Under the revised tax structure, the same drink would now cost around ₹250 before other applicable charges.
- The removal of the special fee further reduces the overall price paid by customers.
Government’s Objective Behind the Decision
Officials believe the revised tax policy will make GIFT City more attractive for:
- Global financial institutions
- Multinational corporations
- International professionals
- Business travelers
- Hospitality and tourism businesses
The move is intended to align GIFT City’s hospitality experience with major financial centers such as Mumbai, Delhi, Singapore, and Dubai while maintaining Gujarat’s prohibition policy elsewhere in the state.
GIFT City Continues to Receive Policy Relaxations
The latest announcement follows a series of reforms introduced over the past few years to enhance GIFT City’s global competitiveness.
Previous reforms include:
- Introduction of the Wine & Dine policy
- Relaxation of liquor consumption rules
- Easier access for eligible visitors and professionals
- Expansion of designated hospitality areas where liquor can legally be served
Limited to GIFT City Only
The tax relief applies only within approved Wine & Dine establishments located inside GIFT City.
Gujarat continues to remain a prohibition state under the Gujarat Prohibition Act, and the revised tax structure does not change liquor regulations outside the notified GIFT City area.
Expected Impact on Hospitality Sector
Industry experts expect the decision to:
- Improve the competitiveness of hotels and restaurants
- Increase business travel and corporate events
- Boost food and beverage revenues
- Enhance GIFT City’s appeal for global investors
- Support long-term development of India’s premier international financial services hub
Conclusion
The Gujarat government’s decision to reduce VAT on foreign liquor and remove the special serving fee marks another important policy reform for GIFT City. By lowering operational costs for licensed hospitality businesses and making liquor prices more competitive, the state aims to strengthen GIFT City’s position as an internationally competitive financial and business destination while keeping prohibition laws unchanged across the rest of Gujarat.
Must read, Surat Municipal Corporation Wins ₹100.55 Crore Incentive Under Jal Hi Amrit Campaign
Watch Latest News Videos on KRH News: Click Here