GST Council in its 26th meeting recommended that GST was not leviable on license fee and application fee, by whatever name it is called, payable for alcoholic liquor for human.
Grant of liquor licenses by State Government against payment of consideration in the form of license fee, application fee etc. was a taxable service under Service Tax, therefore to implement GST Council’s recommendation, Central Government decided to exempt service provided or agreed to be provided by way of grant of liquor license by the State Government, against consideration in the form of license fee or application fee, by whatever name called, during the period from 01.04.2016 to 30.06.2017. Clause No. 117 of Finance (No. 2) Act, 2019 may be referred in this regard.
GST Council decided in the 37th meeting , to clarify that the special dispensation applies only to supply of service by way of grant of liquor licenses by the State Governments as an agreement between the Centre and States 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.