Liquor industry bodies flag concern over Telangana govt’s early payment discount mechanism

Three major alcoholic beverage industry associations have asked the Telangana government to clear pending dues of Rs 3,725 crore before enforcing a new payment mechanism that deducts early payment discounts. They warned that prioritising recent supplies while leaving older receivables unsettled could expose companies to financial risks and audit scrutiny.

Hyderabad: Three leading industry bodies representing the alcoholic beverage sector have urged the Telangana government to clear pending dues of over Rs 3,700 crore before implementing a new payment mechanism that allows deductions for early payment discounts.

The Brewers Association of India (BAI), the International Spirits and Wines Association of India (ISWAI) and the Confederation of Indian Alcoholic Beverage Companies (CIABC) said they had written to the State government expressing concern over the decision to make payments for supplies to the Telangana State Beverages Corporation Limited (TGBCL) after 15 days while deducting a cash discount of 2 to 2.75 per cent.

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According to the associations, the new mechanism came into effect from June 1, 2026, and has been applied to payments for alcoholic beverages supplied during May. They contended that while the cash discount provision exists in tender conditions, it is intended to be exercised at the request of suppliers and not by the buyer, which is the Government.

The associations stated that undisputed dues amounting to Rs 3,725.73 crore for supplies made between the first week of December 2025 and the first week of April 2026 remain unpaid. They argued that making payments against recent supplies while older dues remain outstanding is inconsistent with established commercial practices and could attract scrutiny from auditors of the liquor supplying companies.

In their joint representation, the industry bodies expressed concern that monthly payouts could be directed towards newer dues to avail the cash discount, while older receivables remain unsettled. They said such a practice could increase financial risks for companies and potentially result in receivables turning into bad debts over time.

The associations urged the government to release payments in chronological order and clear outstanding dues before implementing the early payment discount mechanism.