Bengaluru:
The alcoholic beverage industry has welcomed the major excise reforms announced in the Karnataka Budget for 2026–27 by Chief Minister Siddaramaiah, who also serves as the state’s Finance Minister.
Industry bodies said the new measures could modernise the sector and improve the overall tax system.
Positive Step for the Industry
Anant S. Iyer, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), said the government’s decision to rationalise excise duty slabs is a positive move and will benefit several segments of the alcohol industry.
However, he also warned that if the government increases duties in the first four tax slabs, which account for about 85–90% of spirit sales in Karnataka, it could reduce sales in those categories. Since these slabs generate a major share of the state’s excise revenue, lower sales could affect government revenue in the medium term.
Alcohol-Based Tax System a “Historic Move”
Vinod Giri, Director General of the Brewers Association of India (BAI), described the new alcohol-based taxation system as a historic step.
Under the new policy, tax will be linked to the actual alcohol content in beverages, rather than the total liquid volume. Giri said this system is already widely used across the world and is supported by health organisations such as the World Health Organization (WHO).
He added that by linking taxation with alcohol content, the government is balancing revenue generation and public health goals, while also showing leadership in excise policy reforms in India.
Measures to Modernise the Sector
Giri also said the budget recognises the important role the alcohol industry plays in the state’s economy and hospitality sector. The reforms include several steps to modernise regulation and improve ease of doing business.
One notable proposal is to allow beer and whisky tourism trails, similar to those seen in other countries, which could boost tourism and the hospitality industry.
Major Policy Changes Announced
On Friday, Chief Minister Siddaramaiah announced several significant reforms in the state’s liquor taxation and regulatory system, including:
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Introducing a new duty structure based on alcohol content
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Removing government control over liquor price fixation
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Implementing technology-based monitoring systems to improve regulation
The government said these changes aim to bring Karnataka’s excise system closer to global standards while improving transparency and revenue management.
The Aabkari(Abkari) Times magazine occupies a unique niche in the Indian media landscape. As the only Hindi monthly magazine dedicated to alcohol, liquor, excise, and allied industries, it caters to a specific audience with a specialized knowledge base.
