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Hotels, Bars & Restaurants offer Govt. to Consider Abeyance of Liquor Licenses

HRAWI appeals for time extension on fee installments.

Wednesday, May 27, 2020, 10:00 Hrs  [IST]
HBI Staff | Hyderabad

The Hotel and Restaurant Association of Western India (HRAWI) has written to the Maharashtra Government, requesting to devise a policy whereby hotels, restaurants and bars in the State would be able to keep their licenses under abeyance or in custody for a period of one year or until the next renewal date. 

The Association has further requested the State Excise Department to provide an extension of time on the installment scheme by two months in view of the severe loss to business incurred by hospitality players during the lockdown. 

The Association had earlier asked the Government for a waiver of the 15 per cent increase in annual excise license fee. To this, the Government offered liquor license holders the choice to either pay the entire fee by June 1st to receive a waiver or to pay the whole in three installments spread over one year.

“Since 22nd March, 2020 hotels and restaurants have been closed and in-dining specifically has been prohibited. We are not generating any revenue nor are we sure when will we be able to in the foreseeable future. We aren’t even being allowed to sell liquor as take away or deliveries. Against this backdrop we have been asked to pay the liquor license fee with a 15 per cent increase and our request for the rollback of the increase has been ignored. Furthermore, we are not being allowed to sell liquor as take away or deliveries. So now we are requesting the Government to devise a policy whereby restaurants & hotels are able to keep the license under abeyance or in custody for a period of one year or till the next renewal date during the subsistence of this pandemic or till such time that the circumstances are not favorable for doing business. I am sure that this is a very reasonable demand and which is fair to both the Government and the businesses,” says Gurbaxish Singh Kohli, President, HRAWI.

 

HRAWI has also suggested that establishments that choose to keep their licenses in custody should be free to revive their licenses upon payment of fees and with no further new or additional conditions attached when reviving.

 

“For many small establishments Rs.8 lakhs is a significant amount of money especially, to be paid in advance, at once. There is zero cash flow and no assurance if business will continue to survive tomorrow. Under this situation, paying such a huge fee is difficult and it will drain whatever little liquidity an establishment may have in reserve for the uncertain times to come. There are around 18,000 FL III license holders and if the situation persists, the industry will partially collapse. We are afraid that 40 to 50 per cent of businesses will be forced to shut and the fee is an unwarranted financial burden at this time,” says Pradeep Shetty, Vice President, HRAWI.

 

Pursuant to the Excise department circular dated 25.03.2020, in view of the pandemic and lockdown, renewal of license was subject to two schemes whereby the license holders could pay full amount as per old fees rate without 15 per cent hike before 30th April and OR pay the fee at the new increased rate in 3 installments. The time to pay in the first scheme above has now been extended up to 1st June, 2020.

 

“The lockdown is still in force and there is no likelihood of service of liquor to resume in Hotels and Restaurants. It will not take any less than 6 to 8 months after the lockdown opens for the industry to revive. Keeping this in mind and the fact that our industry is severely impacted, we request that the installment scheme be modified by extending the time to pay fees by 2 months on each of the installments. We plead that the payments to be due on 31st August, 2020; 30th November 2020 and 28th February, 2021,” concludes Kohli.

 
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