We have been receiving requests from our ever-loving fans to write an article on starting an online liquor business in India, so here it is. Note: To carry out liquor business online, You need to have at least one brick and mortar shop.
Business Registration: You can set up such business as a PVT. LTD. 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 to have the gym operations from the selected location.
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
Customs Duties
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
Contracts and Agreements between key players
- 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-licence (where drinks are bought and consumed on the premises e.g. pubs, club and restaurants) and off-licence (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.
Terms of service
You are required to have the Terms of services document in place, that has all the required information about services like Age verification and other rules.
License
- Trade License
- Liquor License
- License from the excise Department
- No Objection Certificate needs to be procured from the authorities (like: Police department)
Tax Registration
- VAT
- Sales Tax
- Service tax
Taxes on Foreign and Domestic Liquors
- 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, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.
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