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Published on:
February 23, 2023
By
Paramita

Liquor License Fee Not Liable to GST: Gujarat High Court

As per the order given by the Gujarat High Court, the Liquor License Fee is not liable to GST. The court held that the liquor license fee paid to the state government is not a consideration for the supply of any goods or services and hence, it is not liable to GST.

The court also rejected the argument of the tax department that the license fee is a consideration for the supply of tangible goods such as liquor bottles or empty liquor bottles. The court stated that the license fee is not a consideration for the supply of any goods or services, but for the right to manufacture, sell or distribute liquor.

The court observed that the license fee is akin to a tax on the right to carry on a trade or business and is a consideration for the privilege of carrying on that trade or business. It is not a consideration for the supply of goods or services and hence, it is outside the ambit of GST.

This judgment is significant as it clarifies the taxability of license fee paid to the state government under various state laws. This includes the fee paid for licenses such as food license, health license, entertainment license, and so on. Such fees are not liable to GST as they are not consideration for the supply of any goods or services.

This judgment will come as a relief to businesses that are required to obtain various licenses from the state government. It also provides clarity on the taxability of such license fees under the GST regime.

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Updated on:
March 16, 2024