Telangana may soon witness an 8–10% increase in liquor prices after a government-appointed price fixation committee reportedly recommended a revision in the basic price paid to distilleries, citing a sharp rise in production costs. The Telangana Excise Department is simultaneously examining a proposal to increase additional excise duty in order to boost state revenue, and a comprehensive report covering both proposals is expected to be submitted to the Chief Minister shortly. If approved, the revised liquor prices are expected to come into effect through an official government order.
The review process was initiated after liquor manufacturers and distilleries operating in Telangana approached the government seeking a higher basic price for Indian Made Foreign Liquor (IMFL), premium spirits and beer supplied to depots. Distillery operators informed the Excise Department that rising electricity tariffs, higher transportation expenses, increased prices of glass bottles and carton packaging, and escalating costs of raw materials such as rectified spirit and grains had significantly reduced their operating margins. They also cited higher labour costs, arguing that supplying liquor at the current approved prices had become economically unsustainable.
Following these representations, the government constituted a price fixation committee to examine the requests. The committee reportedly analysed distillery submissions, market data on raw material prices, packaging costs and other production-related expenses, and concluded that a price revision of 8% to 10% would be reasonable, depending on the category of liquor. The recommendation is understood to cover regular IMFL brands, premium liquor brands and beer.
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In parallel with the basic price revision, the Telangana government is also evaluating a proposal to increase excise duty on liquor as part of efforts to enhance state revenue collections. Senior officials are reviewing the existing excise tax structure in Telangana and comparing it with the tax regimes followed by other Indian states. The Excise Department is also calculating the additional revenue that could be generated through a revision of excise duty in line with increased production costs and prevailing market conditions.
Liquor pricing in Telangana is determined through a multi-layered tax structure. The maximum retail price (MRP) is calculated by adding excise duty, special excise cess, value added tax (VAT), the margin of Telangana State Beverages Corporation Limited (TSBCL), and the profit margin of retail liquor traders to the basic price quoted by the distillery. Any increase in either the basic price or the excise duty component would therefore have a direct impact on retail liquor prices across the state.
The last major liquor price hike in Telangana was implemented in May 2022 by the then Bharat Rashtra Samithi (BRS) government. At that time, prices of regular whisky and brandy brands increased by ₹20 to ₹40 per quarter bottle, while premium liquor brands became costlier by up to ₹80. Beer prices were also increased by ₹10 to ₹20 per bottle. Earlier, in May 2020, following the Covid-19 lockdown, the state government had raised excise duty by around 20% to 25%.
According to official sources, the Excise Department has prepared two separate reports for submission to the Chief Minister. The first report contains the price fixation committee’s recommendation for an 8–10% increase in liquor prices, while the second report includes financial estimates of the additional revenue that could accrue to the state through a revised excise duty structure.
Both proposals are expected to be placed before the Chief Minister in the coming days. If the recommendations receive approval, the Telangana Excise Department is likely to issue an official government order revising liquor prices and excise tax slabs, potentially resulting in higher retail prices for IMFL, premium spirits and beer across Telangana in line with current production costs and revenue requirements
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