Beer prices in Karnataka are set to rise following the state government’s decision to increase the tax on beer to 205% of the manufacturing cost, up from the earlier 195%. The revised rates are part of new draft rules issued by the state, which also include a 10% hike in the Additional Excise Duty (AED).
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According to reports, this revision is expected to push the price of premium or imported beer brands up by around ₹10 per bottle, depending on their production cost. More affordable, local or mid-range beers are likely to see a smaller price bump, below ₹5 per bottle. Actual price changes will vary across brands.
With this move, the government has also abolished the earlier dual taxation system. Previously, cheaper beers were taxed at ₹130 per litre, while higher-end options were taxed based on a percentage of the manufacturing cost. Now, a single tax slab of 205% will apply uniformly to all beer brands, regardless of their market segment. Officials say this step is aimed at simplifying the tax structure.
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Third hike in two years
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Third hike in two years
{{/usCountry}}This is the third increase in beer taxation in last two years. In July 2023, the newly elected Congress government raised the AED from 175% to 185%. That was followed by another revision in January 2025, where the AED went up to 195% or ₹130 per bulk litre, whichever was higher.
Alongside AED changes, the base excise duty was also altered earlier. The government introduced a tiered system based on alcohol strength, replacing the previous flat rate. Under this rule, beer with up to 5% alcohol by volume (ABV) attracts a duty of ₹12 per bulk litre, while stronger beer with 5–8% ABV is taxed at ₹20 per litre.