Slug: Burden for boozers
BENGALURU
Alcoholic beverages with higher alcohol content are set to become costlier in Karnataka, while lower-strength variants may turn relatively cheaper under a proposed overhaul of the state’s excise policy that links duty directly to alcohol content.
According to Excise Commissioner R. Venkatesh Kumar, the state is introducing a first-of-its-kind taxation system based on Alcohol by Volume (ABV) per litre, replacing the existing structure tied to maximum retail price (MRP). Under the draft amendment, stronger liquor will attract higher taxes, potentially reshaping pricing across segments.
Excise Minister R.B. Thimmapur said the draft notification issued under the Karnataka Excise Act, 1965, has been opened for public objections and suggestions for seven days. The final framework will be notified after stakeholder consultations, with the government balancing revenue considerations and market impact.
He clarified that the base duty of ₹1,000 per litre of pure alcohol will remain unchanged, while additional excise duties will be recalibrated under the new system. The proposal also reduces the number of duty slabs from 16 to eight, ranging from ₹50 per litre of pure alcohol in lower segments to ₹3,700 for premium categories priced above ₹5,000. Beer will fall under separate slabs ranging between ₹800 and ₹2,700.
Market response to the announcement was positive, with shares of major liquor companies rising during intraday trade. Industry experts believe the shift could further drive premiumisation trends across categories such as whisky, gin, vodka, rum and brandy.
Abneesh Roy of Nuvama Institutional Equities noted that whisky in India typically ranges between 36 percent and 50 percent ABV, while beer varies from 4 to 8 percent. Premium imported spirits and Indian single malts often have higher strengths, making them more sensitive to the proposed tax changes.
Federation of Wine Merchants’ Association General Secretary B. Govindaraj Hegde said the impact on pricing will vary. Lower-priced categories could see a 15–20 percent increase, while premium segments may witness marginal reductions depending on alcohol strength adjustments.
Officials added that concessional rates will continue for defence and paramilitary canteens under the revised structure.
