Telangana craft beer and microbrewery rules, as of October 2026
Telangana has had microbrewery rules since 2015 and widened them in 2025. Here is what the licence allows, how duty is collected through the state corporation and how a bar without a brewery pours draught.
The microbrewery licence
The Telangana Micro Brewery Rules, 2015, notified by G.O.Ms. No. 151 of 26 August 2015, define a microbrewery as a small brewery of no more than 1,000 litres a day where draught beer is made and served for drinking on the premises (rules text). Draught beer means bulk beer that is filtered and carbonated but not pasteurised, drawn from a vessel.
For ten years the licence was limited to Greater Hyderabad. On 28 July 2025 the state Cabinet allowed microbreweries in all municipal corporations. Reports put the licence fee at ₹3 lakh a year plus a ₹1 lakh security deposit (Deccan Chronicle, 28 July 2025). The Microbrewery-25 round then took applications from 3 to 25 September 2025, on Form MB-1A with a non-refundable fee of ₹1 lakh per application. Holders of Elite Bar, TO 1, TO 2, 2B Bar or C1-Club licences could apply, as could restaurants and hotels licensed to serve food (Unsobered, 5 September 2025).
Reports on minimum area disagree. One gives 1,000 square metres of plinth area, another 1,000 sq ft. Check the current notification before you sign a lease.
Draught only, on site only
Beer must be consumed on site and cannot be bottled or sold off the premises, according to the July 2025 report. The same report says draught cannot be served more than 36 hours after production (Deccan Chronicle). We have not seen that clause in the rule text, so confirm it with the excise office.
If it applies as reported, it decides your brew schedule. A brewer cannot fill a serving tank on Friday for a slow Monday. Small, frequent batches matched to covers make more sense than one big weekly brew. The 1,000 litre daily cap rarely binds before the clock does.
No keg sales to other bars, no growlers, no cans. We found no 2025 or 2026 change to that.
Duty, VAT and prices
Telangana collects duty and VAT on microbrewery beer through the state corporation. Under rule 18 a licensee pays 50% of a year's excise duty, VAT and other levies up front, then pays on a monthly invoice raised by the Telangana State Beverages Corporation (rules text). A 2017 bill proposed VAT of 70% on microbrewery draught, on par with bottled beer (Telangana Bill No. 10 of 2017).
For packaged beer the state fixes prices through a Price Fixing Committee. Beer prices rose 15% from 11 February 2025 on its recommendation (The News Minute, February 2025). The special excise cess restored in May 2025 excluded beer (Deccan Chronicle, May 2025). We found no published per litre duty schedule for beer and no confirmed beer duty change in 2026, so get the current rate from the department.
TGBCL and the route to bars
The Telangana State Beverages Corporation, now TGBCL, sits between every brewery and every bar. Bottled and kegged beer from a licensed brewery is priced and invoiced through it. For a craft brand without a microbrewery, that means brewing at a licensed brewery, registering the brand and accepting the corporation's pricing and payment cycle. In January 2025 a major brewer paused supply over delayed payments and unrevised prices, which shows how much the corporation's cycle matters to a supplier's cash (The News Minute).
Pouring craft beer without a brewery
A restaurant that wants beer on tap needs a 2B bar and restaurant licence, which the rules tie to an establishment that serves food. New 2B licences are issued in notified rounds by draw of lots. The latest round invited applications for 41 bars from 28 September to 12 October 2026, with a ₹1 lakh application fee (Deccan Chronicle, 28 September 2026).
The kegs come from licensed breweries through the corporation, not from a microbrewery. A 2B holder can also apply for a microbrewery licence and brew its own, which in practice is the only way to get a small-batch beer onto a Telangana tap.
Contract brewing
We found no contract-brewing provision in the Telangana microbrewery rules. A brand owner who wants packaged beer in the state works with a licensed brewery under the brewery rules and sells through the corporation. Our contract brewing guide explains how those deals are usually structured.
What to check before you commit
Confirm the minimum area, the 36 hour rule, the current VAT and duty on draught and the date of the next application round. This guide is a working summary dated October 2026, not legal advice. Read the latest notification or work with a licensing adviser before you spend on kit.
Common questions
Can a Telangana microbrewery sell beer to other bars?
No. The rules and the July 2025 Cabinet decision describe draught beer consumed on site, with no bottling or off-premises sale.
Where can microbreweries open in Telangana?
Since July 2025, in all municipal corporations, not only Greater Hyderabad. Applications open in notified rounds, so watch for the next one.
How is microbrewery beer taxed in Telangana?
Duty, VAT and other levies are paid on a monthly invoice from the state beverages corporation, with half a year's levies paid up front. Check the current rates with the department.
