BAI, ISWAI and CIABC urge the Telangana government to clear older outstanding payments before settling newer invoices under the state’s revised liquor procurement payment mechanism
India’s leading alcoholic beverage industry bodies have urged the Telangana government to reconsider its newly introduced payment mechanism for liquor supplies, arguing that it could create accounting complications and increase financial risks for manufacturers.
The Brewers Association of India (BAI), the International Spirits and Wines Association of India (ISWAI) and the Confederation of Indian Alcoholic Beverage Companies (CIABC), which together account for more than 80 per cent of liquor, beer and wine sales in the country, have raised objections to the state’s decision to make payments for supplies after 15 days while deducting an early-payment cash discount.
Under the new system, effective from 1 June 2026, payments for alcoholic beverages supplied to the Telangana State Beverages Corporation Limited (TGBCL) during May 2026 have been released after 15 days, subject to a cash discount deduction of between 2 per cent and 2.75 per cent.
Accounting Concerns
In a representation submitted to the state government, the industry associations stated that while the cash discount provision forms part of the tender conditions, it was intended to be exercised at the request of suppliers rather than by the purchaser, namely the government.
The associations also argued that the practice is inconsistent with standard accounting principles.
The industry bodies pointed out that despite the release of payments for recent supplies, dues exceeding Rs 3,700 crore for the period between December 2025 and April 2026 remain outstanding.
Settling newer dues before clearing older ones “defies established commercial norms and could expose companies to serious scrutiny from auditors,’’ the associations said.
Fear Of Rising Bad Debt
The associations further expressed concern that the government could prioritise monthly payouts towards recently raised invoices in order to avail itself of the cash discount, while delaying payments against older liabilities. According to the industry bodies, such a practice could eventually result in long-pending receivables being classified as bad debt, increasing financial pressure on companies operating in the sector.
In their letter to the government, the associations urged authorities to clear outstanding payments in the order in which they became due.
“We urge you to kindly release payments on the basis of chronological order, and not implement any such proposals as may have been contemplated,” the letter said.
