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Bengaluru: Karnataka Budget 2019: End of Pub Capital tag?

Bengaluru, Feb 9 (DC): Happy hours are over. The beer that chilled Bengalureans' weekends will now singe their pockets after Chief Minister H.D. Kumaraswamy doubled the Excise and Additional Excise Duty (AED) on beer; bottle, draught and artisanal in his second Budget, which he presented on Friday.

"Beer has become the proverbial golden goose for the government because of its huge popularity among Bengalureans. It is a wrong move to increase the beer prices. It will further slow down the Food and Beverage (F&B) industry in Karnataka, especially Bengaluru, which is already under a lot of stress. Lots of pubs and bars have shut down because running an F&B in the City doesn't make business sense anymore," voiced the owners of some leading resto-bars, pubs and clubs in the City.

The 2019-20 State Budget has pegged the revenue target for Excise Department for the financial year 2019-20 at Rs 20,950 crore as against Rs 19,750 crore for 2018-19.

The Budget has increased the AED on beer (bottle) from 150 per cent to 175 per cent. The AED on draught beer has gone up from 115 per cent to 150 per cent. Excise duty on beer, which is brewed in microbreweries has been scaled up from the existing Rs 5 per barrel litre (BL) to Rs 10 per BL and the AED has been increased from Rs 12.50 per BL to Rs 25 per BL.

Excise duty on low alcoholic beverages (eg. wine and breezers) has gone up from Rs 5 per BL to Rs 10 per BL and the AED on them has also been revised from the existing 122 per cent to 150 per cent. The increased Excise and AEDs on beer would mean that a 500 ml mug of artisanal beer, which is priced between Rs 250 and Rs 275 in microbreweries, will now cost Rs 300 and odd.

"They have turned beer into a revenue engine in this Budget. Earlier the government tried hard to hard sell Indian Made Liquor by levying huge amount of Additional Excise Duty (AED) on it and the Excise licensees are under pressure to lift a certain amount of IML cases every month but it is impossible for us to sell so much IML. Beer on the other hand has been the best seller throughout the year with the result that Bengaluru alone has 52 microbreweries and some more are in the pipeline. While beer has the potential to drive Excise revenues higher, it's not a smart move to double the taxes on the drink because it would adversely impact the spending power of people. Why tax the poor beer?" asked the owner of a prominent microbrewery in the City.

Government has however, countered the allegations of the licencees.

“The increase in the Excise and AED on beer is on the declared price. It is marginal and will hardly have any impact on beer sales and consumption. The government had levied 12 per cent duties on IML last year. They had spared beer. Under the new tax regime there would be an increase of Rs 5 for a pint of beer at best,” said a senior Excise officer.


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Comment on this article

  • KS Mayya, Mangalore/Bangalore

    Mon, Feb 11 2019

    This is Kumaranna's way of improving the standard of life in Karnataka. The price of beer now is at par with most western cities. Who says Acche din did not come. NaMO is ably assisted by Kumaranna to achieve Acche din.

    DisAgree Agree Reply Report Abuse

  • Naveen kudla, Tulunad state

    Sat, Feb 9 2019

    We Tulunad people are unnecessarily paying taxes to state Govt. Neither we Tuluvas nor Tulunad gets anything from the State Govt.

    DisAgree [2] Agree [21] Reply Report Abuse

  • Paul, Mnaglore

    Sat, Feb 9 2019

    You are happy by paying taxes to central & Feku roaming with that Money.
    But you are worried about paying taxes to State .
    We are not benefiting anything by paying taxes to state or central.
    We slog we earn our leaving

    DisAgree [15] Agree [10] Reply Report Abuse

  • j.anata, Mangaluru / Bengaluru

    Sat, Feb 9 2019

    Actually Kummy & Siddu are KILLING Bengaluru, first converted Garden City to Garbage city, now pub city to Sin city

    DisAgree [7] Agree [15] Reply Report Abuse

  • Elwyn Goveas, Vaflencia

    Sat, Feb 9 2019

    Beer is known to have high calories compared to other alcoholic drinks.Combine this with with poor food habits and lack of exercise you have a beer belly on its way.

    DisAgree [4] Agree [8] Reply Report Abuse

  • Sachin Shetty, Mangalore

    Sat, Feb 9 2019

    People who drink beer are doing good social service. I request the government to provide health insurance to drinkers.

    DisAgree [4] Agree [10] Reply Report Abuse

  • Shankar, Mangaluru

    Sat, Feb 9 2019

    There is no coordination between coalition partners. Sidhu wanted to give free or cheap liquor, Kummi has doubled the taxes!!! Real setback for Congress!!!

    DisAgree [5] Agree [17] Reply Report Abuse

  • Jossey Saldanha, Mumbai

    Sat, Feb 9 2019

    We'll drink "Wine & Spirits" ...

    DisAgree [8] Agree [14] Reply Report Abuse

  • Jossey Saldanha, Mumbai

    Sat, Feb 9 2019

    People will switch over to "Wines & Spirits" ...

    DisAgree [6] Agree [8] Reply Report Abuse

  • Prashant Karkera, Hejamady/Mumbai

    Sat, Feb 9 2019

    Kali parle kali, naturally fermented, no toxic, no hang over, just bit of accumulation of gas which leads to flatulence to the passage of rectal gas ....

    DisAgree [2] Agree [9] Reply Report Abuse

  • Shankar, Mangaluru

    Sat, Feb 9 2019

    Anchina natural kali ithe thikkuji!

    DisAgree [1] Agree [9] Reply Report Abuse

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