Chennai, June 2026: The Tamil Nadu government has doubled the annual liquor licence privilege fee for Chennai establishments from ₹15 lakh to ₹30 lakh, triggering strong opposition from bar and club owners who warn that the hike could push many businesses into financial distress and force prices higher for consumers. The revised fee structure was notified through an amendment to the Tamil Nadu Liquor (Licence and Permit) Rules, 1981, published in an Extraordinary Gazette on 25 June, with retrospective effect from 1 April 2026.
Beyond Chennai, the government has replaced the earlier flat rate of ₹10 lakh applicable to the rest of the state with a population-based fee structure. Corporations with a population above 10 lakh will now pay ₹25 lakh annually, those with population below 10 lakh will pay ₹20 lakh, municipalities will pay ₹15 lakh, and other areas will pay ₹10 lakh. The application fee remains unchanged at ₹10,000, and the licence fee stays at ₹30,000.
The Tamil Nadu Hotel (Bar) and Club Owners Association (TANBAC) has strongly criticised the revision. Dr Benze Saravanan, President, TANBAC, said: “We do not know whether the government wants us to completely walk away from this business. The increase is becoming impossible for many operators to manage.” Saravanan said the state has more than 6,000 FL2 licence holders — bars, clubs and standalone outlets serving alcohol for on-premise consumption — operating under the revised fee structure.
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According to Saravanan, FL2 establishments collectively contribute close to ₹180 crore every month to the state through alcohol procurement, amounting to nearly ₹2,100 crore annually. He noted that operators were already struggling under the previous ₹15 lakh fee, having to set aside roughly ₹1.5 lakh every month just to cover the licence cost, on top of electricity charges, salaries, rent and other operating expenses.
The privilege fee has risen sharply over the past decade — from ₹4 lakh in 2016 to ₹30 lakh now in Chennai. TANBAC also flagged disparities across licence categories, noting that FL3 licence holders, primarily star hotels, pay around ₹6 lakh in fees while enjoying extended operating hours, whereas FL2 holders pay significantly more while remaining bound by an 11 am to 11 pm operating restriction with no equivalent concessions.
TANBAC has warned that the increased financial burden is likely to be passed on to consumers through higher retail prices. Saravanan said a beer currently purchased by outlets at around ₹200 is already being sold to consumers at approximately ₹400, and could rise to as much as ₹600 if operators are forced to absorb the new licence fee burden without any relief.
With over 6,000 FL2 establishments affected across Tamil Nadu and the fee hike already in retrospective effect from April, the coming months are likely to see continued representations from bar and club owners seeking a review of the revised structure, even as the state looks to the higher fees to bolster its excise revenue collections for 2026-27.
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