Gandhinagar: In a major move aimed at enhancing the appeal of Gujarat International Finance Tec-City (GIFT City), the Gujarat government has announced significant tax relief on liquor served within the financial hub.

Through two separate notifications, the state has reduced the Value Added Tax (VAT) on foreign liquor in GIFT City from 65% to 25% and abolished the special fee of around ₹240 levied on every 30 ml serving of alcohol.

The latest notifications are part of the state’s efforts to operationalise the wine-and-dine policy announced for GIFT City, India’s first international financial services hub. The policy aims to provide a more business-friendly environment for global investors, professionals and visitors while maintaining the restrictions applicable in the rest of Gujarat, where prohibition remains in force.

The impact of the revised tax structure is expected to be substantial. Earlier, a 30 ml serving of foreign liquor with a base menu price of ₹100 would cost about ₹561 after factoring in the special fee and VAT. Following the tax revisions, the same drink will cost approximately ₹125. Similarly, a drink priced at ₹1,000 on the menu, which previously cost around ₹2,046 after taxes and fees, will now cost about ₹1,250.

It is learnt that industry stakeholders, including professionals working in GIFT City, hospitality operators and government officials, had repeatedly flagged high liquor prices as a concern. The special fee of ₹8,000 per bulk litre, equivalent to ₹240 per 30 ml serving, was applied uniformly across all liquor categories, while the 65% VAT was calculated on both the menu price and the special fee, significantly increasing the final retail cost.

Industry representatives argued that the pricing structure affected GIFT City’s competitiveness as a global financial and business destination and discouraged investments in the hospitality sector. The revised policy is expected to support the growth of a stronger food and beverage ecosystem within the city. DeshGujarat