Gujarat Slashes Liquor Tax in GIFT City by 40%, Prices Drop 25-35%

The Gujarat government has significantly reduced the Value Added Tax (VAT) on alcohol served in the Gujarat International Finance Tec-City (GIFT City) in Gandhinagar, leading to a sharp drop in prices for consumers. According to a notification issued by the state finance department on June 23, the VAT on liquor within GIFT City has been lowered from 65% to 25%, and a special fee of Rs 240 per serving (30 ml) has been abolished.

The new rates took effect on Wednesday, resulting in price reductions of 25-35% for a small peg of spirits. For instance, a serving that was priced at Rs 1,180—including a menu price of Rs 475 and taxes—now costs Rs 594, nearly half the previous price. Officials said the decision came after repeated requests from investors and employers in the financial hub to make the exemption from Gujarat's prohibition laws more 'viable' and 'affordable' for both consumers and hospitality operators.

GIFT City is a dedicated financial services zone developed as a global financial hub. While Gujarat enforces prohibition across the state, GIFT City operates under special exemptions that permit the sale and consumption of alcohol in designated areas. The tax cut is expected to boost the hospitality sector and make the city more attractive for businesses and professionals.