The Karnataka government has implemented a 5% hike in the prices of beer and low-range Indian-made liquor (IML), marking the fourth increase in two years. The change, effective from Thursday, follows a rise in additional excise duty (AED) on beer from 195% to 200%, as detailed in a government notification issued Tuesday.
Initially, the state planned a 10% AED hike but scaled it down after the Federation of Wine Merchants Association Karnataka strongly opposed repeated increases. The association argued that frequent price hikes hurt consumers and the liquor trade, prompting the government to reconsider.
The hike reflects the government’s strategy to boost revenue through higher taxes on liquor. Liquor traders have expressed concerns that such measures could impact sales and strain the industry.
With this decision, Karnataka continues to rely heavily on liquor taxation as a source of state revenue. Despite the reduced hike, the rise is expected to affect both consumers and retailers, with price adjustments now in effect.
This marks another instance of a growing trend of taxation on alcoholic beverages, keeping the sector under scrutiny amid financial pressures on the state government.
