Liquor prices revised in Karnataka after new alcohol tax system implemented
Karnataka has implemented a new Alcohol-in-Beverage (AIB)-based excise duty structure effective May 11, 2026, marking the first such move in India. The reform aims to rationalize liquor prices, make alcohol more affordable, and align rates with those of neighboring states. The number of tax slabs for Indian Made Liquor has been reduced from 16 to 8, with pricing now influenced by market considerations.
- ▪The new AIB-based excise duty system was introduced on May 11, 2026, following the 2026-27 Budget announcement by Chief Minister Siddaramaiah.
- ▪Karnataka reduced Indian Made Liquor tax slabs from 16 to 8 to simplify the taxation structure and lower consumer prices.
- ▪The excise policy deregulated government-administered price fixation, allowing producers to determine product placement within tax slabs based on market factors.
- ▪The revised pricing aims to make alcohol cheaper in Karnataka and align it with rates in Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, and Kerala.
- ▪The AIB-based taxation model is recognized globally as the gold standard for alcohol taxation.
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Liquor prices revised in Karnataka after new alcohol tax system implementedThe excise department said the new tax structure aims to rationalise liquor prices, make alcohol cheaper and align rates with neighbouring states.Updated on: May 17, 2026 2:31 PM ISTPTIShare viaCopy link The Karnataka government has implemented an Alcohol-in-Beverage (AIB)-based excise duty structure in the state and revised the rates of liquor.Karnataka has cut liquor tax slabs from 16 to 8 under new excise policy.
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