Premium Liquor to Become Cheaper in Karnataka

Bengaluru: Starting July 1, the prices of premium liquor in Karnataka will see a significant reduction. As part of the budget announced by Chief Minister Siddaramaiah, the state government issued a draft notification on Thursday to rationalize tax slabs on premium liquor, aiming to make prices competitive with neighboring states and boost the sector’s growth.

The notification indicates that the new pricing structure will be effective from July 1. The excise department has opened a window for objections regarding the reduction in excise duties on 16 categories of high-end liquor. Government sources revealed that from July 1, prices will decrease by amounts ranging from Rs 100 to Rs 2,000, depending on the brand. The reduction will apply to various types of liquor, including brandy, whiskey, gin, and rum, but will not affect beer, wine, toddy, and fenny.

An official highlighted that Karnataka’s liquor prices are generally higher compared to neighboring states, leading to revenue losses as consumers prefer buying from those regions. “The rationalization of tax slabs is expected to significantly increase tax revenues over the next 2-3 years. While there may be a slight revenue dip initially, increased sales volume will ultimately enhance tax collection,” the official stated.

In Karnataka, alcohol is taxed according to an 18-slab system, with the cheapest alcohol in the first slab and the most expensive Indian Made Liquor (IML) in the 18th. Premium IML brands are notably pricier in Karnataka due to high taxes among other factors. For example, a premium brand of Scotch whiskey costs around Rs 7,000 in Karnataka, which is considerably higher than in other states.

This tax rationalization move is expected to level the playing field, making Karnataka’s premium liquor prices more competitive and stimulating market growth.