Govt abolishes addl excise tax on bars, restores price parity

Vijayawada: The state government abolished the Additional Retail Excise Tax (ARET) levied on bars, bringing major relief to bar licence holders and restoring price parity between retail liquor shops and bars.

The excise department principal secretary Mukesh Kumar Meena on Tuesday issued GO Ms No 24, formally removing the special ARET that had been imposed on bars since November 2019. The decision follows a review of excise policies implemented between 2019 and 2024 and recommendations made by a Group of Ministers (GoM) constituted to frame a new excise roadmap.

With the removal of ARET, Indian Made Foreign Liquor (IMFL) and Foreign Liquor (FL) supplied to bars from Andhra Pradesh State Beverages Corporation Limited (APSBCL) depots will no longer attract any additional tax. As a result, the invoice price of liquor supplied to bars will now be the same as that supplied to retail shops, eliminating the long-standing price differential.

The government noted that the exclusive levy of ARET on bars had created market distortions and was inconsistent with the principle of uniform taxation. The GoM observed that prior to November 2019, liquor prices supplied from APSBCL depots were uniform for both bars and retail outlets.

To give effect to the decision, the government has amended the AP Excise (Grant of Licence of Selling by Bar and Conditions of License) Rules, 2025. Rule 28 has been omitted, along with specific ARET-related conditions in various bar licence formats. References to ‘Bar Additional ARET’ have also been deleted from relevant forms.

The amendments have been notified in the Andhra Pradesh Gazette and came into force on January 13, 2026. The Director of excise, the commissioner of distilleries and breweries and APSBCL officials have been directed to implement the changes.

Officials said the move is expected to significantly reduce operating costs for bar owners and bring greater transparency to the excise framework.