Hyderabad: The liquor industry on Monday urged the Telangana government to clear its Rs 31 billion dues, which led to serious liquidity tightening and working capital challenges. It also urged the state government to allow prices for supplier companies to rise in response to the sharp rise in production costs.
Industry associations and companies have written to Chief Minister A. Revanth Reddy and Consumption Tax Minister Jupalli Krishna Rao, urging Telangana Beverage Company Limited (TGBCL) to clear dues as the industry continues to maintain adequate supply capacity over the past year has been affected.
Anant S. Iyer, Director General of the Indian Alcohol Beverage Company (CIABC), said he expressed deep concern about the delay in payments and the issue remained unresolved despite repeated statements and assurances. Overdue box offices with overdue of more than 45 days were Rs 31 billion, while the cumulative interest burden was close to Rs 3.25 billion. However, member companies continue to ensure an uninterrupted stock supply.
“In addition to delaying payments, our member companies are under increased financial pressure because they have to pay licensing fees in advance and mark registration fees in the current fiscal year. The uncertainty of payments lies in the harm of a strong business in the state. This situation will not only limit the existing investments in the state to not only the existing investments of the business, but also make people unnecessarily unreliable.
Payments from the Telangana ban and excise tax department have been delayed since the second half of 2023, exceeding the 45-day credit period outlined in the Exchange Rate Contract Agreement (RCA). These extended delays have already put a huge financial burden on the alcoholic beverage industry, greatly increasing working capital demand and therefore increasing interest costs.
