Thiruvananthapuram: Kerala will introduce a separate sales tax structure for low-alcohol beverages as part of efforts to promote the marketing of lower-strength alcoholic drinks in the state.

Announcing the measure in the 2026-27 Budget, Chief Minister V D Satheesan said the new tax rates are being brought in following amendments made to the Foreign Liquor Rules under the 2022-23 Abkari framework.

The government has classified alcoholic beverages containing 0.5% to 20% alcohol by volume (ABV)—excluding beer and wine—as Low Alcoholic Beverages (LABs). The new tax structure is aimed at bringing greater clarity to the taxation of products falling under this category.


New tax rates

  • 0.5% to 10% alcohol content: 120% sales tax
  • More than 10% and up to 20% alcohol content: 175% sales tax

According to the Budget announcement, the revised rates will be notified under the Kerala General Sales Tax Act to create a distinct taxation framework for low-alcohol products.

The Budget also outlined fresh measures to strengthen the state's anti-drug enforcement efforts. Kerala CM said all Excise offices across Kerala will be equipped with drug-detection kits capable of identifying a wide range of narcotic substances, including so-called "new-generation drugs".

In addition, the government will expand Operation Thoofan, the Excise Department's enforcement drive aimed at curbing drug trafficking and substance abuse.