Hyderabad: Around 35,000 cases of liquor and beer lying unsold in Telangana Beverages Corporation Ltd (TGBCL) depots every month attract ground rent and, in applicable cases, recovery of the balance 70% excise duty, according to industry sources. While companies pay ground rent ranging from 1.5% to 13.5% depending on how long the stocks remain in storage, they have sought relief from the levy of the balance 70% excise duty on damaged, worn-out and short-supplied stocks.Under the existing system, liquor companies supply their products to TGBCL, which acts as the wholesale distributor and sells them to retailers. According to industry sources, companies initially pay 30% excise duty to the govt while supplying the stock. Once the retailers lift the stock from TGBCL depots after paying the remaining 70% excise duty and other applicable taxes, the 30% duty deposited by the companies is refunded to them.
Excise duty relief
According to industry sources, stocks lying in TGBCL depots do not attract any ground rent for the first 90 days. If they remain unsold beyond that period, companies have to pay ground rent of 1.5%. The levy rises to 6% after 180 days and further to 13.5% if the stocks continue to remain in the depots for more than 300 days.Sources said that once the 300-day period is crossed, TGBCL identifies the long-pending stocks and writes to the companies asking them to either take them back for reprocessing or give consent for draining out the liquor. Though the alcohol generally remains fit for consumption for nearly two years, prolonged storage often results in changes in colour and appearance, making the stock unsuitable for retail sale. The companies can either reprocess the liquor or permit TGBCL to destroy it.Industry sources said companies opting for drain-out are required to pay the balance 70% excise duty on such stocks. The excise department’s stand, according to the sources, is that the duty would have accrued to the govt had the stock been sold to retailers.The companies have also opposed recovery of the balance 70% excise duty on short-supplied stocks. They said that if a supplier commits to deliver 100 cases but supplies only 90, the remaining 10 cases are also treated as liable for the balance 70% excise duty on the premise that the govt has lost the revenue it would have earned had those cases been sold through retailers. Companies have contended that such recovery is unwarranted as the stock was never supplied to TGBCL or sold in the market. They have similarly sought relief from the levy on damaged and worn-out stocks, arguing that these categories should not attract excise duty as they never reach consumers.Suppliers seek release of ₹4,750 crore duesLiquor and beer companies have urged the Telangana govt to clear around ₹4,750 crore in pending payments for supplies made between the second week of Dec 2025 and the third week of May 2026, saying the dues have remained unpaid well beyond the 45-day contractual credit period. While acknowledging that TGBCL released around ₹1,742 crore during June and July 2026, the companies said about ₹28.3 crore was deducted as cash discount despite substantial old dues remaining unpaid. They have also sought a transparent payment schedule and supplier wise payment details to enable reconciliation and improve cash flow.
