Chief Minister says that starting April 2026, the taxes will be levied based on the actual alcohol content of beverages
Aimed at overhauling the Karnataka Excise Act, Chief Minister Siddaramaiah stated that the state will now shift to a global taxation standard and will deregulate alcohol pricing. The CM introduced the alcohol-in-beverage (AIB) excise duty structure.
While presenting the state budget, the CM informed that starting April 2026, the taxes will be applied based on the actual alcohol content rather than total volume. In an attempt to avoid any market disruption, the transition will be done over the next three to four years. CM said that the state has ended its role in fixing liquor prices.
As part of the new policy, price fixation is deregulated. The reports noted that the move is aimed at allowing manufacturers to place their products in slabs on the basis of competition in the market.
Karnataka Chief Minister added that the state will significantly simplify its alcohol pricing framework by reducing the number of pricing slabs. To streamline the structure further, the number of pricing slabs for alcoholic beverages will be brought down to eight from the current 16, he noted, adding that the move aims to rationalise the pricing system.
Alongside these policy reforms, the government plans to introduce technology-driven mechanisms to reduce leakages and strengthen monitoring of liquor movement across the state. Physical escorts used during dispatches will be replaced with geo-fenced e-lock systems, a step expected to improve transparency and allow real-time tracking, the chief minister added. He set an ambitious revenue target of Rs 45,000 crore from the excise sector for 2026-27.
He said the state will introduce a series of reforms aimed at easing regulatory processes for the alcohol-beverage sector. Manufacturing licences will be auto-renewed, while approvals for labels, CL-5 (occasional licences) and RVB licences will be automatically generated upon online self-declaration and payment of fees, with deemed approval and no manual intervention.
He further noted that distilleries and breweries will be permitted to operate round the clock. The requirement to display mandatory malt and sugar content on beer labels will also be removed, he added.
In another step, the government plans to promote tourism linked to the alcohol sector by allowing distilleries and breweries to host tasting sessions and sell products manufactured on-site directly to visiting tourists.
