Central Board of Indirect Taxes and Customs (CBIC) has issued a Circular No. 121/40/2019-GST to clarify on applicability of GST on license fee charged by the States for grant of liquor licenses to vendors.

CBIC has clarified that service by State Government by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called as neither a supply of goods nor a supply of service which has also been notified vide Notification No. 25/2019-Central Tax (Rate) dated 30th September, 2019.

Further it has also been clarified that this would apply only to supply of service by way of grant of liquor licenses by the State Governments and has no applicability or precedence value in relation to grant of other licenses and privileges for a fee in other situations, where GST is payable.

For further details please refer the attached document.

Source: Central Board of Indirect Taxes & Customs