The Telangana State Beverages Corporation Limited (TSBCL) is collecting 2 percent Tax Collected at Source (TCS) from liquor shop owners, ignoring certificates issued by the Income Tax Department that allow lower rates.
Published Date – 26 May 2026, 09:32 PM
Hyderabad: Trust the cash-strapped Congress government to come up with novel ideas to mop up revenues!
The latest technique of mopping up nearly Rs 1,200 crore a year, albeit temporarily, has put the liquor shop owners in a quandary, with their funds getting locked up with the Government for an indefinite period of time. Let’s look at the ingenious modus operandi.
Liquor shop owners buy liquor every month from the Telangana State Beverages Corporation Ltd (TGBCL). At the time of purchase, an advance income tax called Tax Collected at Source (TCS) is collected by the corporation on all purchases made. If the tax collected is in excess, the shop owner will reclaim it when he files his IT returns. So far, one per cent of the total value was being collected, but now the Union Government has enhanced it to two percent.
But there is some relief for the liquor shop owners. Depending on their turnover, they can approach the IT department seeking less percentage of TCS to be paid and the IT department chief issues a certificate pegging the TCS at different levels like half percent or one percent or one and half percent depending on the turnover of the liquor shop owner. Based on this certificate, the corporation has to collect the TCS.
But here comes the masterstroke from the Government. It is not honouring the TCS percentage fixed by the IT department but is insisting on collection of two percent, though it is mandatory to honor the IT department certificate.
How does the Government benefit?
There are nearly 2,400 liquor shops across the State. In addition to these, there are bars and other outlets. On average each shop owner purchases stocks anywhere between Rs 70 lakh to Rs 1.5 crore every month.
The purchases in respect of some could even go up to Rs 2 crore to Rs 2.5 crore also and in some instances Rs 4 crore per month also. If an average of Rs 2 crore liquor being bought from the corporation per shop, the purchases would be to the tune of Rs 4,800 crore and the TCS (at 2 per cent) works out to around Rs 96 crore a month. That means, the corporation will be collecting and holding additional money, as it is not honouring the IT department certificate of lesser percentage to be collected.
Of course, this money can be claimed back by the liquor shop owner, but he can do so at the end of year only. Till such time the additional money collected is parked with the Government only.
How many shop owners got IT certificates for lesser TCS?
Sources say that nearly 300 liquor shop owners approached the IT department and got certificates for lesser TCS. But they are feeling helpless as the TGBCL is insisting on collection of two percent on every purchase made.
What do liquor shop owners say about this ?
The Telangana Wine Dealers Association argues that this was being done primarily to ensure rotation of funds by the Government. The collection of higher TCS imposes additional financial burden throughout the year.
As the sales turnover varies among shops, several outlets qualify for lower TCS rates. For instance, on monthly purchases of Rs 2 crore, a shop owner would have to pay Rs 4 lakh towards TCS even if he possesses a certificate permitting one percent TCS collection.
“At this rate, every month the shop owner ends up paying an excess Rs 2 lakh to TGBCL. Considering the rising operational costs, paying an additional Rs 2 lakh every month has become financially challenging for liquor shop owners”.
What are they going to do now?
Concerned over the issue, a few liquor shop owners reportedly approached senior officials in the Excise Department requesting them not to insist on two percent TCS collection. However, their appeals were ignored. In 2009 too, a similar situation arose, but the then government considered their appeals and refrained from such higher TCS collection.
The Telangana Wine Dealers Association is now planning to approach senior government officials and submit a formal representation.
