Gujarat cuts VAT, removes special fee on liquor in Gift City

The Gujarat government has reportedly reduced the tax on liquor served in Gujarat International Finance Tec-City (GIFT City). According to reports, the state has issued two separate notifications reducing the Value Added Tax (VAT) on foreign liquor from 65% to 25%, and removing a special fee on the liquor. 

According to reports citing sources, the decision has been taken to make liquor prices in GIFT City similar to those in major cities like Mumbai and Delhi. Officials believe this will help create a better social environment and attract more professionals, multinational companies and financial institutions to the city.

The price difference after the tax cut is significant. Earlier, a drink with a menu price of ₹200 would cost ₹330 after adding 65% VAT. With VAT reduced to 25%, the same drink will now cost ₹250.

Also, a ₹240 special fee was charged on every 30 ml serving, and VAT was calculated on both the menu price and the special fee. This made liquor much more expensive than in other metro cities and affected the growth of the food and beverage business in GIFT City.

The state has also removed the special fee.

Officials reportedly said that the decision has also been taken keeping future plans like the proposed 2030 Commonwealth Games in mind, as some venues are expected to be near GIFT City. The latest move comes after the state relaxed prohibition rules in GIFT City in December 2023 and eased more liquor-related restrictions in December 2025.