Premium Liquor Brands In Karnataka To Become Cheaper From July 1

In a move that is likely to bring cheer to tippler, the Karnataka government has announced plans to reduce the additional excise duty on premium liquor brands, making them cheaper starting July 1. In line with its budget announcement, the state government announced plans to revise the prices of semi-premium and premium liquor brands to align with prices in neighboring states. This proposal is now being implemented.

To achieve this goal, the government plans to adjust prices based on the average rates prevailing in other states. Prices for cheaper liquor brands will increase, while those for more expensive brands will decrease to align with rates elsewhere. Semi-premium liquors may see a reduction of 10 per cent, while prices for premium foreign brands could decrease by 12 to 15 per cent.

The new prices will be determined based on the liquor price lists in other states, aiming to boost excise revenue and curb the illegal smuggling of liquor into the state. To achieve this, the government has consistently increased the AED on Indian Manufactured Liquor (IML) in July 2023, and on beer in January 2024. However, this marks the first instance of the government reducing AED rates.

A draft notification has been submitted, providing a seven-day period for raising objections. Currently, the prices of semi-premium and premium liquor in Karnataka are higher than those in neighboring states like Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, and Kerala due to the elevated additional excise duty rates. This has led to a significant amount of liquor being illegally supplied to Karnataka from neighboring states, resulting in revenue loss for the state government. By revising the AED rate, the state government aims to increase liquor sales and boost excise duty revenue.

For example, the cost of a 750 ml bottle of Grata, which was previously Rs. 2000, will now range between Rs. 1700 and Rs. 1800. Likewise, high-end spirits that were priced at Rs. 5000 and Rs. 7100 per bottle will now be reduced to Rs. 3600-3700 and Rs. 5200 respectively.

In Karnataka, liquor brands are classified into 18 categories based on price. The first five categories contribute to 75 per cent of the total income from liquor sales, while semi-premium liquors from the 6th to 12th categories contribute 20 per cent, and premium foreign liquors from the 13th to 18th categories contribute the remaining 5 per cent. To boost revenue, the government plans to double the prices for liquors in the second to fifth categories, resulting in an expected overall increase of 7 to 8 per cent.