Gandhinagar: Gujarat govt has uncorked major tax relief for liquor consumers in Gujarat International Finance Tec-City (GIFT City), one of the country’s premier financial hubs in Gandhinagar. In two separate notifications, state govt has slashed value added tax (VAT) on foreign liquor served in GIFT City from 65% to 25% and scrapped the special fee of around Rs 240 on a 30 ml alcohol serving.Top sources close to the development said that by abolishing the special fee and sharply reducing VAT, the state aims to bring price parity with major metro cities and ensure similar evening social life to attract national and global talent here.“In doing so, Gujarat govt has removed a long-standing anomaly that made a drink in the fintech hub several times more expensive than in most Indian metros,” a senior official said.To put the price cut in perspective, a back-of-the-envelope calculation reveals that earlier a 30 ml foreign liquor drink with an estimated menu price of Rs 100 in a wine-and-dine facility in GIFT City cost Rs 561, factoring in the Rs 240 special fee and Rs 221 VAT calculated at 65%. After the recent fee and tax cut, the drink will now cost Rs 125. On the higher side, a 30 ml drink with a Rs 1,000 menu price earlier cost Rs 2,046 with similar fee and tax; it will now cost Rs 1,250.Sources said the move promises to be a game-changer, as exorbitant pricing was proving to be a deterrent, reflected in feedback from professionals working in GIFT City, hospitality players and even govt officials.“A special fee of ₹8,000 per bulk litre, translating to Rs 240 per 30ml serving, was levied uniformly across all liquor categories. Such a fee does not exist in any comparable market such as Mumbai or Delhi. The 65% VAT in GIFT City was calculated on Menu Price plus the special fee whereas other states levy VAT only on the menu price. This compounded VAT significantly inflated the final retail price. Thus, incompetitive liquor prices diminished GIFT City’s appeal as a global business and lifestyle destination while hospitality operators reported reduced margins, disincentivizing new investments and limiting the development of a vibrant Food & Beverage (F&B) ecosystem in GIFT City,” the source explained.Insiders said govt’s decision has been implemented with an eye on the state hosting the 2030 Commonwealth Games. “Some venues for the proposed games are located within the vicinity of GIFT City. More so, similar liquor sales provisions could be implemented in zones where guests related to games will stay,” said a senior govt official.It needs mention that this relaxation in liquor costs follows the state’s earlier decision to relax prohibition rules at GIFT City in December 2023 and further easing of other liquor-related restrictions within GIFT City in Dec 2025. This was the first instance of Gujarat govt relaxing prohibition rules, allowing those in the fintech hub to consume liquor and entertain guests. Officials said the latest measures are intended to make the city more attractive for multinational companies, financial institutions and highly skilled professionals considering relocation to the hub.
