The Telangana High Court has granted interim relief to bar and restaurant owners by staying the collection of the newly introduced Special Privilege Fee for four weeks. The order, passed on Friday, October 30, 2026, follows a legal challenge filed by 114 bar and restaurant operators questioning the validity of the additional levy imposed by the Telangana government.
The Special Privilege Fee applies to holders of Form 2B bar and restaurant licences and is linked to the volume or value of liquor stocks purchased from the Telangana State Beverages Corporation Limited (TGBCL). Introduced through a Government Order (GO) dated October 19, 2026, the levy ranges from 8% to 16%, depending on the applicable purchase slab and licence category. The fee is calculated on liquor supplies procured by licensed establishments through the state beverage corporation.
The government introduced the purchase-based fee structure in place of the earlier system, under which privilege fees were linked to annual turnover multipliers. The revised mechanism reportedly aims to improve monitoring and revenue collection by using purchase invoices and stock procurement data. It also seeks to address concerns that some establishments underreported turnover or experienced difficulties under the previous assessment system.
However, the petitioners challenged the government’s authority to impose the additional charge, arguing that neither the Telangana Excise Act nor the rules framed under it expressly empower the state to introduce such a fee. They questioned the legal basis of the October 19 government order and sought judicial intervention against its implementation.
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After considering the submissions, Justice Namavarapu Rajeshwar Rao granted an interim stay on the implementation of the government order and collection of the Special Privilege Fee for four weeks. The court also directed the Excise Commissioner and the Managing Director and General Manager of TGBCL to submit detailed counter-affidavits responding to the petitions.
The matter has been adjourned to November 27, 2026, for the next hearing. The interim order provides temporary relief to the affected establishments, while the legal validity of Telangana’s new liquor procurement-linked fee remains to be examined by the High Court.
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