The Karnataka government is planning to make beer more expensive by increasing the additional excise duty on it. This could lead to a price hike of Rs.8-10 per 650 mL bottle. The government is considering this move to generate more revenue, and the extra money collected will be used to support the Congress party’s five guarantees.
The proposed increase in excise duty is expected to be finalized this month or in early February. This decision is said to be driven by a significant rise in the sales of strong beer.
If the new rules are implemented, the additional excise duty on bottled beer produced or imported into Karnataka will go up from the current 185% to 195%, as mentioned in a draft notification to amend the Karnataka Excise (Excise Duties and Fees) Rules, 1968.
This is the second time liquor prices have gone up in the last six months. In July of the previous year, Chief Minister Siddaramaiah increased the additional excise duty on Indian-made liquor by 20% and on beer by 175% to 185%.
To understand, excise duty and additional excise duty are taxes imposed by the government on the production and sale of goods. Excise duty is a general tax on items made or sold within a country, while additional excise duty is an extra tax imposed on specific items to achieve certain goals, such as discouraging consumption or promoting alternative products or revenue streams.