Patna: Bihar cabinet decided on Monday to refund license fees to bars, hotels and retail foreign liquor shops, besides giving 'export duty exemption' to distilleries of the state.
"The state cabinet gave its nod to Registration, Excise and Prohibition Department's proposal to refund license fees to bars, restaurants, hotels, retail foreign liquor shops," Principal Secretary (Excise) K K Pathak said.
License fee, movement fee, excise duty or VAT deposited by bars, restaurants, hotels, foreign liquor shops would be refunded to them following the state government's decision to enforce complete prohibition, he said.
The move has come as a relief to those who have deposited license fee for running bars, restaurants, hotels, clubs, and retail foreign liquor shops in the state for 2016-17.
Pathak, however, could not specify the exact amount of license fees that would be refunded by the state government.
The cabinet also gave its nod to the excise department's proposal to exempt distilleries from export duty in order to facilitate export of 'ethanol' and 'extra neutral alcohol' (ENA) from Bihar to other states.
At present, there is 50 paisa per litre export duty on ethanol while it is Rs 4 per litre on ENA, Pathak said.
Export duty exemption would cost around Rs 4 crore to the state exchequer, he added.
There are 12 sugar and grain based distilleries in the state which produce ethanol and ENA.
ENA is used in the manufacturing of foreign liquor while ethanol is blended in petrol, excise officials said.
It would help the distilleries in making them financially viable in the state, officials said adding that distilleries have got an order of 5 crore bulk litres of ethanol purchase from oil companies.
Chief minister Nitish Kumar had announced last week that the government would refund license fees to those who had deposited fees for running their business for 2016-17.
Senior BJP leader Sushil Kumar Modi had also demanded that the state government return 'license fees' it had collected for 2016-17 from bars.
After sale and consumption of country and spiced liquor in rural areas were banned on 1 April, the government imposed on 5 April total ban on sale and consumption of liquor including Indian Made Foreign Liquor (IMFL).