• Source:JND
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Beer prices in Karnataka are set to increase as the state government has proposed to raise tax on all beer brands to 205 per cent of the manufacturing cost, up from the previous 195 per cent. The revised rates would be in effect as an additional 10 per cent has been added to the Additional Excise Duty (AED). The revised rates aim to simplify the current tax structure and are likely to come into effect in about two weeks after public objections are reviewed.

With the new tax slab, premium or imported beers are expected to cost around Rs 10 more per bottle. Mid-range and budget beer brands may see a smaller hike, likely under Rs 5 per bottle, according to multiple reports. The actual impact will vary by brand and manufacturing cost.

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Previously, Karnataka followed a dual taxation policy, where lower-end beers were taxed at Rs 130 per litre, while premium options were taxed as a percentage of manufacturing cost. The new rules eliminate this bifurcation, applying a flat 205 per cent tax rate across all beer types, irrespective of price or quality. Officials say this will streamline the system and make administration easier.

This is the third time the beer tax has been revised since July 2023. The Congress-led state government initially raised the AED from 175 per cent to 185 per cent in 2023. It was hiked again in January 2025 to 195 per cent or Rs 130 per bulk litre, whichever was higher. The latest increase further intensifies the tax burden on beer manufacturers and consumers.

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The government is aiming to boost excise revenue to Rs 40,000 crore, and beer taxation plays a significant role. In 2023-24, Karnataka earned Rs 5,702.86 crore from beer, up from Rs 4,460.60 crore in 2022-23 and Rs 2,757.30 crore in 2021-22, a News18 report stated.