Bengaluru:  In a historic shift for India’s liquor industry, the Karnataka government has officially rolled out a new Alcohol-in-Beverage (AIB)-based excise duty framework alongside a comprehensive revision of liquor prices across the state.

According to an official release by the State Excise Department on Sunday, this structural overhaul fulfills a key promise made by Chief Minister Siddaramaiah in the 2026-27 state budget. The initiative is designed to simplify liquor pricing, offer relief to consumers through more affordable rates, and bring Karnataka’s pricing model in parity with border states like Goa, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala.

"For the first time in India, the AIB-based excise duty structure has been implemented in Karnataka from May 11, 2026. It is globally recognised as the gold standard for alcohol taxation," the Department stated.

A major highlight of this policy shift is the complete deregulation of government-controlled price-fixing. Under the new rules, manufacturers now have the autonomy to position their products within tax brackets based on market dynamics.

Per the official gazette notification issued on May 8, 2026, the state has streamlined the existing Indian Made Liquor (IML) classification, condensing it from 16 complex pricing slabs down to just eight.

The Excise Department emphasised that this aggressive consolidation was executed to ensure local consumers can access alcoholic beverages at highly competitive and reduced rates, bridging the historical price gaps with neighboring southern and western states.

The newly updated rate card covers a wide array of popular IML and beer brands, with final retail prices adjusting according to the new consolidated slabs, packaging sizes, and specific alcohol-by-volume (ABV) metrics.

PTI