Karnataka rolls out India’s first alcohol-in-beverage liquor tax system
Karnataka has implemented India's first Alcohol-in-Beverage (AIB) excise duty system, replacing the previous bulk litre-based model. This reform aims to align liquor prices with neighboring states while restructuring taxes based on alcohol content. The new framework is expected to lower prices for some alcoholic beverages while increasing costs for others, particularly in the budget liquor category.
- ▪The AIB-based excise duty system came into effect on May 11, 2026.
- ▪The number of Indian Made Liquor slabs has been reduced from 16 to eight under the new framework.
- ▪Prices for mild and lager beers with 5% alcohol content could fall by 20-25%, while premium Scotch whisky prices may decline by about 20%.
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Karnataka rolls out India’s first alcohol-in-beverage liquor tax systemThe revised framework removes government-administered price fixation, allows producers to position products within pricing slabs based on market considerationsUpdated on: May 17, 2026 8:18 PM ISTBy Arun Dev, BengaluruShare viaCopy link Karnataka introduced an Alcohol-in-Beverage (AIB)-based excise duty system, replacing its earlier bulk litre-based taxation model in what the state government described as the first such reform in India, which came into force on May 11.A salesman arranges liquor bottles inside a liquor store in Bengaluru, India.
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