Sir, I want to build an online beer store with a simple business plan: Users will come to my website, choose the products they want to buy, opt for cash on delivery. As per the user’s delivery address, the nearest beer store would get a notification of the order details and the store would take the responsibility of delivering the order along with verifying the legal drinking age of the recipient at the time of delivery.
So the online platform won’t do anything except taking orders on behalf of a real beer store and passing the information to it and charge the store for some commission for its service. Now suppose this website will only serve Pune in the beginning. Would this whole thing be legal?
Question from: Karnataka
According to entry number 51, the seventh schedule of our constitution state has the right to collect excise duties on liquor. Entry no 51 read as Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India:-
- Alcoholic liquors for human consumption;
- Opium, Indian hemp and other narcotic drugs and narcotics, but not including medicinal and toilet preparations containing alcohol or any substance included in subparagraph (b) of this entry.
So when you start online trading of liquor product then you have to get a license from each state. Some states have syndicate and some have a separate contract with each licensee. When a product moves from your site (payment made) then excise duty should be levied on the initiation of movement.
But in your case payment will be done on your site and product will be delivered from different locations of India so at which place duties shall be levied? This is the main hurdle in your business. If duties are levied on your portal then you need a license for this business (trading of liquor without a license is an offence) and right now there is no rule to issue the license for online trading of alcoholic liquor.
Alcohol is out of GST
The goods and service tax (GST) is not applicable to the trade of alcohol. Parliament has to pass a constitutional amendment to bring the trade of alcohol within the purview of GST. Resultantly, there is no uniform tax regime on the trading of alcohol. This is the primary hurdle in the online trading of alcohol.
Amid the countrywide lockdown the International Spirits & Wines Association of India (ISWAI), the Confederation of Indian Alcoholic Beverage Companies (CIABC) and other beverage associations have approached the Central Government to allow the online trading of alcohol in green and orange zones. They requested to permit home delivery of alcohol but their requests are still pending before the government. According to some news media reports, all major states in the country are planning to permit home delivery of alcoholic beverages.
On the Public Interest Litigation filed by Sai Deepak, the Supreme Court suggested that the state should consider the indirect sale of alcohol. However, the suggestion was made to avoid crowding at liquor shops amid the lockdown but it seems that the government may permit the online trading of alcoholic liquor in India. The government should allow online trading of alcohol because it will generate direct and indirect jobs in India.
When the government is capable to regulate direct selling of liquor then it is possible to make uniform law for regulation and trading of alcohol in India. This is the need of the hour to start home delivery of alcohol through online portals like swiggy, zomato etc.