Indulging in liquor businesses in India for the purpose of making profit or livelihood can be a well-thought-out profitable business for the hotel industry and restaurant industry. Because of various reasons, the profits margins are rapidly increased. For acquiring liquor licenses, a dealer has to go through a lot of legal processes and compliances. Furthermore, in India, every state has its requirements and framework through which they keep a check on the sale and consumption of alcoholic beverages in a particular state. Every state has its own set of rule and regulations to govern liquor sales and consumption.
In legal provisions, Liquor License can be delineated as legal acquiescence offered by the State Excise Department to any individual or business entity who wants to expand their business boundaries by selling alcoholic beverages at a particular place. It is obligatory for a business owner who is involved in the business of liquor distribution to obtain a liquor license and follow the guidelines and rules & regulations framed by the authorities governing the liquor distribution and sale in the state.
The Uttar Pradesh Excise License Rules, 1991
The U.P Excise License Rules, 1991 is used to standardize the grant of licenses to sell foreign liquor and country liquor in the state. The grant to sell these licenses is offered by the tender-cum-auction system by making the necessary payment under Section 30. The licensee has to apply in form F.L. 5-A to acquire a license for the retail sale of foreign liquor. The number of shops will be maintained by the Licensing Authority. Liquor Shops have to be settled on the date approved by the date published issued by the Excise Commissioner in Form G-35-D.
Auction of Shops
The licensing of the retail sale of country liquor, foreign liquor and Bhang is made in separate sections of the auction. Auctioning of licenses is done shop-wise. The shops may be auctioned in groups and the decision is made by the authority of licensing.
Submission of Tender
The tender (1) contains the following information and must be submitted in a closed cover and it must be addressed to the authority of auctioning for obtaining a liquor license.
Tenderer or tenderers name with address and father’s name.
Shop or group of shops location and the type of shops for which the applicant has applied the tender.
The basic license fee for the liquor shop or group of shops in words and in figures.
The tender must be supported by a demand draft, the value of which should not be less than 10% of the entire sum.
Auction Procedure
Following are the steps that are required for conducting an auction for a liquor license:
Step 1: Presiding of the auction
The auction will be supervised by the authority of Licensing. This will be supervised by the Excise Inspectors on Pre-emptive Duty and by the Tehsildar.
Step 2: Withdrawing the licenses
As per the directives of the Excise Commissioner, the officer conducts an auction to extract any license from the auction before commencing the auction. Bids with a small amount from INR 100 to INR 1000 will not be accepted and bids with huge amounts above INR 10,000 are accepted.
Step 3: Recording the bid maker
Name of the person making the offer along with the amount that will be recorded by the administrator who is carrying out the auction. The signatures of the lowest bidders and the highest bidders will be taken in the noise sheet.
Step 4: Submission of the tenders
Ahead of submission of the tender, the licensing authority considers the bids and makes decisions. After bids are decided, no negotiations will be entertained. The final receiving will be sanctioned by the Excise Commissioner which will be determined by the State Government if there is any revision. Every bid is valid till the Excise Commissioner declares the final verdict.
Step 5: Declaration of Minimum Guaranteed Quality
In the auction announcement, the Excise Commissioner announces the minimum guaranteed quality. The licensee has to pay the amount that is fixed by the Excise Commissioner.
Step 6: Ensuring the Sale
The licensee has to make sure that the sale is planned within the minimum guaranteed quantity for that excise year before the termination of the term of the license. The remaining quantity has to be affirmed by the licensee to the Authority of Licensing on the next day. Nevertheless, a licensee cannot claim for refund or damages of bid money if there is a postponement in the supplement of alcohol.
Step 7: Proposal of Action
Through form G-33A, the Excise Commissioner sends a tender of action to all the certified shops.
Step 8: The Final Decision
A declaration has to be sent to the Excise Commissioner through Form D-12 within 30 days of the auction. After this is made, the final decision will be taken by him within a month.
Conclusion
In legal provisions, Liquor License can be delineated as legal acquiescence offered by the State Excise Department to any individual or business entity who wants to expand their business boundaries by selling alcoholic beverages at a particular place. It is obligatory for a business owner who is involved in the business of liquor distribution to obtain a liquor license