Karnataka Increases Excise Duty on Beer Again, Prices Set to Rise
Beer is set to become more expensive in Karnataka, as the state government has revised its taxation policy, increasing the excise duty on all beer to 205% of the manufacturing cost, up from the previous 195%. Additionally, the Additional Excise Duty (AED) has been raised by another 10%, according to the newly proposed draft rules.
This marks the third hike in beer taxes in the last three years, placing further burden on consumers and brewers alike. Premium beer brands could see price increases of around ₹10 per bottle, while mid-range and economy beers are likely to rise by less than ₹5 per bottle.
The latest policy changes include the removal of Karnataka’s dual taxation system. Earlier, low-end beers were taxed at a flat rate of ₹130 per litre, while others were taxed on a percentage basis. Now, the state has adopted a unified 205% tax rate across all beer types, simplifying the tax structure.
Past revisions included:
- July 2023: AED raised from 175% to 185%.
- January 2025: AED hiked to 195%, or ₹130 per bulk litre, whichever was higher.
- Introduction of tiered excise based on alcohol content:
- ₹12/litre for beers with ≤5% ABV
- ₹20/litre for beers with 5–8% ABV
Industry insiders warn that this frequent escalation in taxes may hurt beer consumption and discourage new market players. Meanwhile, the government maintains the move is aimed at streamlining taxation and boosting revenue.
