Beer prices hiked again in Karnataka with 10% additional excise duty
Beer prices in Karnataka are set to rise after the government increased the tax on all beer to 205% of the manufacturing cost, up from 195%. An additional 10% have also been added to the Additional Excise Duty (AED), according to the state's new draft rules.Premium or niche beer brands may see a rise of about Rs 10 per bottle, depending on manufacturing costs. For mid-range and cheaper local beers, the increase is expected to be less than Rs 5 per bottle. The exact price hike will vary by brand.advertisementPreviously, Karnataka had a dual tax system: lower-end brands were taxed at Rs 130 per litre, while others faced a percentage-based rate. This system has now been scrapped in favour of a single 205% tax applied uniformly to all beers.
The move is aimed at simplifying the tax structure. With the lower tax tier removed, all beer brands — regardless of category — will now be taxed at the same rate.This marks the third tax hike on beer in the last three years. In July 2023, the newly elected Congress government raised the AED from 175% to 185%. Another revision came into effect on 20 January 2025, increasing the AED to 195%, or Rs 130 per bulk litre, whichever was higher.At the same time, the base excise duty was also revised. Instead of a flat rate, a tiered system based on alcohol content was introduced: Rs 12 per bulk litre for beer with 5% or less alcohol by volume (ABV), and Rs 20 per litre for beer with 5-8% ABV.advertisement
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