Counsel

When operating a business of selling alcohol yourself, the greatest legal challenge is to have a liquor vend license in every state where you plan to sell. These are expensive, short in number and hard to come by at the best of times.

Other challenges are permissions to move liquor across state borders; presumably say where your main warehouse is in one part of the country and the customer in another.

Selling alcohol on an "off shop" basis (for consumption away from the premises) is heavily regulated in India, with state specific laws and regulations governing the same. Each state has a different set of requirements which need to be met in order to sell alcohol.

Moreover, getting a license for selling alcohol is an expensive proposition, and to get state specific licenses will be a massive headache for someone trying to open countrywide. There is a reason we don't have chain liquor stores in India, because of the licensing regimen we have in place.

To carry out liquor business online, one need to have at least one brick and mortar shop.

Registration:

You can set up such entity as a LLP, Private Limited company You can apply for provisional registration certificate for any item that does not require an industrial license. A provisional registration certificate will be given to you. Note provisional registration certificate is valid only for short term. Once you get all the clearance, you can apply for permanent registration.

Shops and Establishment:  Once you fix up on the location to have the shop, Shops and Establishments Act, is enacted by every state in India to regulate conditions of work, and to provide for regulation of the employers and rights of the employees in un-organized sector of employment and other establishments. By doing this registration, you will be legally allowed for business in particular area.

Custom duties and Taxes Cost on the production and distribution side can be hard to track given that the IMFL industry is largely controlled by the state with interventions.

With reference this article: https://www.wazzeer.com/blog/ever-thought-starting-daaru-venture/

Regulatory Barriers:

• Food Safety and Standards (Packaging and Labelling) Regulation established by FSSA
• Labelling rules
• Alcohol Laws of India
• State to state laws and regulations

Contracts and Agreements:

• Primarily farmers: who grow ingredients such as barley, hops, apples, grapes and sugar
• Producers: Companies that manufacture alcohol, managing processes such as brewing, distillation, and bottling
• Distributors & Wholesalers: Intermediaries who connect producers and vendors, typically storing and transporting the product
• Vendors: Sellers of alcohol – both on-license (where drinks are bought and consumed on the premises e.g. pubs, club and restaurants) and off- license (where the drinks are bought and then taken away to be consumed e.g. supermarkets)
• Dealers: As a liquor dealership, there are other contracts that must be notarized.
• Input Suppliers/Contractors: Companies that supply products and services to any of the above e.g. providing farm machinery, distillation equipment, freight services, marketing, consultancy, lobbying etc.

License:

• Trade License
• Liquor License
• License from the excise Department
• No Objection Certificate needs to be procured from the authorities (like: Police department)

Taxes:

• GST
• Taxes differs from state to state, it is constantly used as a moral and legal foundation for restrictive policies.
• Imported Foreign Liquor (IFL) shall be heavily taxed and regulated by federal government.
• Today average customs duties on IFL remain as high as 150 per cent
• Liquor trade between states is also difficult and costly. Taxation levels and accounting methods vary significantly from state to state.

Start-up process entails complex procedures and many bureaucratic hurdles, 'Get a Wazzeer' to have us take care of the complete legal and accounting compliance for you.