TASMAC liquor price hike: Association of recreation clubs, star hotels challenges empty bottle buyback scheme in Tamil Nadu

Representational image. File

A writ petition has been filed in the Madras High Court challenging the Commissioner of Prohibition and Excise’s 2022 circular with respect to empty liquor bottle buyback scheme in Tamil Nadu. The petition claims the circular had led to the latest increase in the Maximum Retail Price (MRP) of liquor bottles by imposing an environmental and social welfare cess of ₹10 per bottle with effect from November 1, 2026.

The plea is expected to be heard by Justice N. Senthilkumar on November 12, 2026. An association of FL2 (non-proprietory clubs which sell liquor to its members) and FL3 (star hotels which sell liquor in their bars/serve it to their customers in the hotel rooms) licencees in the State had approached the court challenging the validity of the circular on the ground that it was arbitrary and quixotic.

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In an affidavit filed on behalf of Tamil Nadu FL2, FL3 and Hotel Association, its secretary M. Jaiganesh of Madurai said, the FL2 and FL3 licences were issued by the Commissioner of Prohibition and Excise on collection of substantial amount of money towards privilege fee and licence fee every year. The licencees, thereafter, purchase liquor in wholesale from Tamil Nadu State Marketing Corporation (TASMAC).

Members of recreation clubs, which hold FL2 licence, were entitled to consume the liquor either within the club premises or take it home. And when the customers take the liquor bottles home, it becomes difficult for the clubs to collect the empty liquor bottles from those customers and deposit those empty bottles back with the TASMAC, the petitioner association said.

Stating that the genesis of the empty liquor bottle buyback scheme was an order passed by a special Division Bench constituted to hear environment related cases, the association said, the Commissioner of Prohibition and Excise had mechanically issued a circular on August 2, 2022 for implementing the scheme without taking into account the resultant hardship caused to clubs and hotels.

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The association said, initially the TASMAC retail vending shops began collecting ₹10 over and above the MRP per liquor bottle and refunded the additional charge on return of empty bottles since the Division Bench was highly concerned over the empty glass bottles being thrown in public places, agricultural fields and forests thereby causing harm to humans as well as animals.

However, on October 29, 2026, the Commissioner of Prohibition and Excise had decided to stop the practice of collection of ₹10 over and above the MRP and instead increase the MRP of the liquor bottles by imposing an environmental and social welfare cess of ₹10 per bottle. It was also decided to install reverse vending machines for collection of empty bottles and refund of ₹10 per bottle.

Contending the increase in the MRP of liquor bottles through imposition of the cess would affect the business of recreation clubs and star hotels, the association said, no such cess could be levied on recreation clubs which were not liable to pay even service tax. “Clubs also cannot follow their members to their private residences to collect the empty bottles and surrender them to TASMAC,” it added.