Under a new wine taxation policy, the Karnataka government has implemented a new Alcohol in Beverage (AIB) excise duty structure and reworked prices of alcoholic beverages throughout the state.
Karnataka becomes the first Indian state to convert to the world-wide accepted technique of taxation under AIB-based model which taxes the real alcohol content in beverages, says the State Excise Department. The new system will start from May 11 after the announcement by the Chief Minister Siddaramaiah in the 2026–27 State Budget.
The decision is designed to rationalise liquor pricing, ensure that prices are aligned with other bordering States like Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala, and to boost the consumption of alcoholic beverages in the market in Karnataka, officials said.
The government also has deregulated the previous price-fixation system as part of the reform. Manufactures and Producers will now have the leeway of providing the product in the market according to the competition and demand of the market.
The Excise Department also said it reduced the pricing slabs of Indian Made Liquor (IML) cutting from 16 to eight in an attempt to rationalize the pricing structure and increase transparency.
The prices are subject to revision for several popular brands of liquor and beers, which differ based on alcohol content, product category and package size, and have already been notified. The government has thought that the changes will produce a more balanced tax system and enhance competitiveness with neighbouring States.