Liquor industry associations have raised concerns over Telangana’s new payment mechanism for supplies to the state beverage corporation, which includes a 2% cash discount and 15-day payment cycle.

Associations of the Indian alcoholic beverage sector have written to the Government of Telangana, raising their concern regarding the State Government’s unilateral decision to start paying for the supply of alcoholic beverages after 15 days, upon a 2% Cash discount.

The Government of Telangana has started a new payment mechanism with effect from June 1, 2026, under which payments for alcoholic beverages supplied to the Telangana State Beverage Corporation (TGBCL) in the month of May 26 have been made after 15 days upon deduction of an early payment cash discount of 2- 2.75%.

Industry flags concerns over new payment mechanism

The associations, including the Brewers Association of India (BAI), the International Spirits and Wines Association of India (ISWAI), and the Confederation of Indian Alcoholic Beverage Companies (CIABC), point out that while the cash discount is a part of the tender conditions, it is intended to be exercised at the request of suppliers, not the buyer, i.e. the Government.

This, they argue, is contrary to standard accounting practices, as the Government has begun making payments on recent dues, while the old, undisputed dues of over ₹3,700 crore for the period from December 2025 to April 2026 remain outstanding.

The Associations maintain that settling newer dues before clearing older ones defies established commercial norms and could expose companies to scrutiny from auditors.

Beverage firms seek clearance of pending dues

The Associations are also concerned that the Government may divert its monthly payouts to clear new dues to earn the cash discount, while older outstandings remain unpaid. Over time, this could result in legitimate receivables turning into bad debt, creating a massive financial burden and risk for the industry.

In their joint letter to the Government of Telangana, the three Associations say “We would like to bring to your notice that, as per our records, as on date, payments have been cleared for sale up to first week of December, 2025, and pending payments for the period first week of December to first week of April 2026, to the tune of ₹3725.73 crore is still pending. In light of the above, we find the proposed action by the Government to start deducting early payment on current supplies very disturbing and against the principles of normal commercial transactions, and is fraught with non-compliance accounting standards, and subject to scrutiny by auditors.”

The alcoholic beverage industry has instead urged the Government to release payments in chronological order and to clear the outstanding amounts immediately. “We urge you not implement any such proposals as may have been contemplated”, says their joint letter.

The letter added that the Government has, however, decided to proceed with its unilateral and arbitrary decision, seemingly driven by financial needs and the belief that it has the power to carry out any action because of its dominant position.

Published on June 12, 2026