Fast-tracked liquor licenses at Tourism Zones; Ella first in line

By Madhusha Thavapalakumar

Prime Minister Ranil Wickremesinghe recently instructed the Ministry of Finance to issue a gazette to ensure the tourism establishments situated in areas declared as “Tourism Zones” are provided liquor licenses through an expedited process, The Sunday Morning Business reliably learnt.

Sources from the Department of Excise told us that under this scheme, Ella is likely to be the first to be declared as a Tourism Zone by the Government due to lobbying by businesses and tourism stakeholders in the area.

The Ministry of Tourism Development, Wildlife, and Christian Religious Affairs and the Urban Development Authority are the two main institutions that must identify Tourism Zones while the Department of Excise should issue liquor licenses to those identified areas.

However, to issue the licenses, the Department of Excise requires the gazette to be issued by the Ministry of Finance.

Following the issuance of the gazette, the Department of Excise must prepare a legal document with the support of the Ministry of Finance for the implementation of this initiative.

Thereafter, with careful inspection of the applicant, the Department of Excise has to recommend the applicant to the relevant divisional secretariat in order to be issued a liquor license. In addition to Ella, Galle Fort and several cities Down South along the coastal belt will also be declared as Tourism Zones, making the respective establishments eligible to obtain expedited liquor licenses.

The Department of Excise is also considering issuing liquor licenses to yachts that sell liquor to tourists on board.
This license would be similar to the Railway Refreshment Room License which permits the sale of liquor to passengers from 11 a.m. to 2 p.m. and 5 p.m. to 8 p.m.

Issuing expedited liquor license was a long-pending decision taken even prior to the Easter Sunday incidents as a measure to promote tourism in Sri Lanka as well as to provide a solution to the increasing unlicensed liquor establishments.

It is reported that there are a growing number of tourist establishments which prefer to sell liquor without a license as the penalties for the offence are lower and less cumbersome in comparison to the lengthy procedures and inconvenience they would face, if they applied for a license. Operating without a license also enables the establishment to avoid taxes.

Unlicensed offenders rarely suffer imprisonment and are usually let off with a fine and thus, have little deterrent to carrying on its unlicensed business. Furthermore, unlicensed hotels sell liquor at a much lower price than that of licensed hotels, gaining an unfair competitive advantage over the licensed, law-abiding hotels and attracting a higher number of tourists for its affordability.

The Department of Excise issues 45 different types of licenses based on the type of business. License fees are fixed for each type, and in certain categories, subsidiary licenses are issued free of charge. A fee of Rs. 7,500 is levied for a non-refundable application. Excise licenses are renewed for periods of three years and the license holder can opt to renew annually.

According to the Excise Notification No. 983 in the Excise Ordinance, the annual license fee of the Distillery License except palmyrah is Rs. 100 million while the Manufacturer’s Wholesale Arrack/Beer/Foreign Liquor Outlet License, Toddy Bottling License, Wholesale License for Liquor, Supermarket Liquor License, and Tourist Board-approved Hotel License for hotels with over 200 rooms are Rs. 1 million each.