The All India Brewers’ Association (AIBA) supports evidence-based and transparent policymaking in the alcohol sector.

Karnataka’s Excise Reform: A Structural Shift Led by the Revenue Mobilisation Committee (RMC)
The Revenue Mobilisation Committee (RMC) constituted by the Government of Karnataka has proposed a comprehensive redesign of the state’s excise system. This marks a significant shift from traditional revenue-driven models toward a framework that integrates public health, economic logic and administrative efficiency.

For decades, excise systems across India have been built around price slabs, product categories and multiple layers of administrative control. While these systems have ensured steady revenue flows, they have also created distortions, compliance challenges and a misalignment between taxation and the actual impact of alcohol consumption on society.

The RMC’s recommendations seek to address this gap through a more rational and evidence-based approach.
The All India Brewers’ Association (AIBA) supports evidence-based and transparent policymaking in the alcohol sector.
A strength-based approach aligns with global best practices and encourages lower alcohol content beverages, promoting responsible consumption. The current excise structure does not adequately reflect this. Taxes are largely based on price and product categories rather than alcohol content. However, a phased, predictable and balanced implementation is essential to ensure market stability and prevent unintended consequences.
The RMC Approach: Strength-Based Taxation
The RMC proposes a shift to strength-based taxation, where excise duty is levied per litre of pure alcohol, referred to as Alcohol-in-Beverage (AIB).

Proposed Tax Framework
The RMC recommends:
• A specific excise duty per litre of pure alcohol
• A target rate of approximately ₹2,000 per litre by FY 2028–29
• A state VAT component to maintain parity with general taxation
Policy Direction: Budget 2026–27
The Government of Karnataka has already initiated reforms aligned with the RMC’s recommendations:
• Introduction of AIB-based taxation from April 2026
• Rationalisation of price slabs from 16 to 8
• Gradual implementation to avoid disruption
• Movement toward market-driven pricing mechanisms

These measures signal a clear transition toward a more transparent and efficient excise system.
Conclusion
The RMC’s recommendations mark a pivotal moment in India’s excise policy landscape. By aligning taxation with alcohol content and social cost, Karnataka is moving toward a system that is more rational, efficient, and socially responsible.
With careful implementation and stakeholder collaboration, this reform can serve as a model for future excise policies across India.