Telangana High Court stays new fee on bars, restaurants

Hyderabad: In a relief to restaurant and bar owners, the Telangana High Court on Friday, October 30, stayed the collection of the newly introduced Special Privilege Fee for four weeks.

What is Special Privilege Fee?

The Telangana government’s Special Privilege Fee is an additional levy imposed on Form 2B bar and restaurant licence holders based on the volume or value of liquor stocks purchased from the Telangana State Beverages Corporation Limited (TSBCL)

Introduced via a Government Order (GO) on October 19, 2026, the fee ranges between 8 per cent and 16 per cent (with some proposals or slabs scaling up depending on the category and purchase tier) and is applied directly to liquor supplies purchased by bars.

Traditionally, the excise department collected privilege fees based on annual turnover multipliers. Due to difficulties tracking actual turnover and complaints that some bars underreported or faced poor business, the state shifted toward a Point-of-Sale/purchase-based slab system tied to stock invoices from TSBCL.

The stay order comes after 114 bars and restaurants approached the High Court challenging the government’s decision to impose the additional fee, questioning its legal validity.

They argued that neither the Telangana Excise Act nor the rules framed under it specifically empowered the government to impose such a fee.

Representing the excise department, Counsel A Jagan argued that bar licensees had already submitted undertakings agreeing to pay any fees levied by the government in the future. He said that approaching the court after accepting the agreement violates the conditions of the agreement. Jagan also told the court that the agreement was legally valid.

Justice Namavarapu Rajeshwar Rao considered the legal questions raised by the petitioners and granted an interim stay on the implementation of the government order for four weeks.

The court directed the Excise Commissioner and the Managing Director and General Manager of TGBCL to file detailed counters.

The matter has been adjourned to November 27 for the next hearing.

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