The Karnataka government has recently reduced excise duty slabs, making premium liquor more affordable across the state. This move aims to align the prices of high-end liquor with those in neighbouring states, thereby boosting local sales and increasing excise revenue. The change, part of the 2024-2025 Budget, is expected to bring down the prices of premium liquor by around 20%, although the new rates may take about a week to be fully implemented as the updated rate cards are still awaited.
The revised excise duty applies to spirits such as brandy, whiskey, gin, and rum, but excludes beer, wine, toddy, and fenny. The decision has been welcomed by the hospitality industry, which had been advocating for rate rationalisation.
However, the revision in excise duties comes with a trade-off, as beer prices are likely to rise. According to a report by Deccan Herald, the Excise Department has proposed three different slabs for beer based on alcohol strength, which could increase the cost by Rs 10 to Rs 30 per bottle, depending on the brand and alcohol content.
The department has also suggested higher Additional Excise Duty (AED) for both bottled and draught beer. They have also proposed that beer manufacturers should display the minimum percentage of malt and sugar by weight on their bottles, and have called for a doubling of AED for microbreweries.
The final decision on these proposals will be made after stakeholders have had the opportunity to submit any objections.