Daijiworld Media Network – Bengaluru
Bengaluru, May 18: In a significant overhaul of the state’s liquor taxation framework, the Karnataka government has rolled out an Alcohol-in-Beverage (AIB)-based excise duty system and revised liquor pricing across categories.
In an official press statement issued on Sunday, the State Excise Department said the new taxation model has been introduced in line with Chief Minister Siddaramaiah’s Budget 2026–27 announcement. With this move, Karnataka has become the first state in India to adopt an AIB-based excise duty system.
Officials said the policy aims to stabilise liquor prices, ensure more affordable availability for consumers within the state, and bring Karnataka’s rates in line with neighbouring states including Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala.
The department further stated that the new system came into effect on May 11, 2026, and is being projected as a “gold standard” in global alcohol taxation reforms.
Sweeping change in pricing mechanism
Under the revised framework, the earlier government-controlled pricing model has been completely dismantled. Instead, manufacturers will now be permitted to categorise their products into price bands based on prevailing market conditions.
According to a government notification dated May 8, 2026, Indian Made Liquor (IML) categories have been rationalised, with the number of slabs reduced sharply from 16 to eight, in a bid to simplify the structure.
Officials said the restructuring is intended to ensure liquor is available at comparatively lower and more stable prices for consumers, while also maintaining parity with neighbouring states such as Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala.
New pricing structure introduced
The revised rates cover widely consumed Indian Made Liquor (IML) brands as well as beer variants. Prices will now vary depending on pack size, alcohol content, and the newly introduced slab-based classification system, marking a major shift in how retail pricing is determined across the state.