In a move aimed at making Gujarat International Finance Tec-City (GIFT City) more attractive to global businesses and professionals, the Gujarat government has announced a steep reduction in taxes on liquor served within the financial hub.
Under two notifications issued by the state government, the Value Added Tax (VAT) on foreign liquor in GIFT City has been reduced from 65 per cent to 25 per cent. The government has also abolished the special fee of nearly ₹240 charged on every 30 ml serving of alcohol.
The decision is part of efforts to implement the wine-and-dine policy introduced for GIFT City, India’s first international financial services centre. The policy seeks to provide a more conducive environment for investors, expatriates and business visitors while preserving Gujarat’s prohibition framework outside the designated zone.
The revised tax regime is expected to substantially lower liquor prices. Earlier, a 30 ml serving of foreign liquor with a base menu price of ₹100 would cost around ₹561 after adding the special fee and VAT. With the revised rates, the same serving is expected to cost approximately ₹125. Likewise, a drink priced at ₹1,000 on the menu, which previously cost about ₹2,046 after taxes and fees, will now cost around ₹1,250.
Industry stakeholders had repeatedly highlighted the issue of high liquor prices in GIFT City. The special fee of ₹8,000 per bulk litre, equivalent to about ₹240 for a 30 ml serving, was imposed uniformly across all categories of liquor. In addition, the 65 per cent VAT was calculated on both the menu price and the special fee, significantly increasing the final cost to consumers.
Representatives from the hospitality sector and business community had argued that the pricing structure reduced GIFT City’s competitiveness as an international financial destination and hindered the growth of hospitality-related investments. The latest tax relief is expected to encourage the development of a stronger food and beverage ecosystem and improve the overall business environment within the city.