Beer Prices Set To Rise In Karnataka As Government Hikes Excise Duty

Beer drinkers in Karnataka may soon feel a pinch in their wallets, as the state government has proposed a hike in excise duties on beer. As per the new draft rules, the excise duty will increase from the existing 195% to 205% of the cost of production, with an additional 10% duty also set to be imposed across all beer varieties.

The price revision will vary depending on the brand and production costs.

Previously, Karnataka operated under a dual taxation model: lower-end beer brands were taxed at a fixed Rs 130 per litre, while premium brands were subject to a percentage-based rate. The new tax structure replaces this system with a flat 205% duty across all beer categories, a move aimed at simplifying the state's excise framework.

Additionally, the government had introduced a tiered excise base duty based on alcohol content. Beer with 5% or less alcohol by volume is taxed at Rs 12 per bulk litre, while beer with 5-8% ABV incurs a Rs 20 per litre charge.

The proposed tax changes extend beyond beer. The excise department's notification also hints at upcoming price hikes for other alcoholic beverages, including whisky, brandy, and gin, with potential increases ranging from Rs 10 to Rs 15 per quarter bottle.

The move is part of a broader effort by the government to boost revenue, with Chief Minister Siddaramaiah setting a target of Rs 40,000 crore in excise collections. The excise department has issued a notification outlining the changes and has invited public objections within seven days.

If approved, the new rates could come into effect shortly after the public objection period ends.