Beer to get costlier in Karnataka as state hikes excise tax third time in two years

This change, part of new rules, will affect premium beers by approximately ₹10 per bottle and local beers by under ₹5.

Updated on: May 1, 2025, 16:37:12 IST

By HT News Desk

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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).

Beer prices set to go up in Karnataka after revised taxes. (pixabay)

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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

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.

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