Hyderabad: In a major relief for bar and restaurant owners, the Telangana High Court has stayed the collection of the newly introduced Special Privilege Fee for four weeks. The interim order came after 114 bar and restaurant license holders challenged the government’s decision, arguing that neither the Telangana Excise Act nor the rules framed under it provide the legal authority to impose the additional levy. After considering the preliminary arguments, the court suspended the implementation of the government order until further hearing.

The Special Privilege Fee was introduced through a Government Order issued on October 19, 2026. Under the new system, Form 2B bar and restaurant licence holders were required to pay an additional fee ranging from 8% to 16%, calculated on the value or volume of liquor purchased from the Telangana State Beverages Corporation Limited (TSBCL). The state government said the purchase-based system was introduced to replace the earlier turnover-based model, which faced difficulties due to inaccurate reporting and verification of business turnover.

During the hearing, the Excise Department argued that bar owners had already signed undertakings agreeing to pay any future fees imposed by the government, making their challenge inconsistent with those agreements. However, Justice Namavarapu Rajeshwar Rao observed that the legal issues raised by the petitioners required detailed examination and granted an interim stay on the fee collection for four weeks. The court has directed the Excise Commissioner and senior officials of TGBCL to file detailed counters, while the next hearing has been scheduled for November 27.