The new draft notification by the Karnataka government, having sweeping excise reforms in the Alcohol-in-Beverage (AIB)-based duty structure, will help “revenue maximisation goal” of the state, the Brewers Association of India (BAI) has said.
Terming it a watershed moment, BAI said it will not only optimise revenue but also meet public health goals of moderation.
BAI said the Karnataka Excise (Excise Duties and Fees Amendment) Rules, 2026, outline a taxation system that is based on the premise that the product to be taxed is the alcohol and not the water that accompanies it.
“This is the WHO-recommended gold standard for alcohol taxation and is widely followed in the world,” said a statement from BAI.
BAI represents leading players from the brewing industry — United Breweries, ABInBev and Carlsberg — which together account for around 85 per cent of the beer sold in the country.
On Saturday, the Karnataka government issued a Draft Notification to amend the Karnataka Excise (Excise Duties and Fees) Rules, 1968, to implement sweeping reforms in the state’s alcobev sector by introducing an AIB-based taxation structure, besides announcing several other structural reforms.
These changes were earlier announced by Chief Minister Siddaramaiah while presenting the Karnataka State Budget 2026-27 last month and are now in the process of notification.
“By announcing an AIB-based taxation mechanism, Karnataka has become the first state in the country to explicitly link the revenue maximisation goal of the state with desired public health outcomes. We hope that other states, too, will soon implement an explicit linkage of tax with alcohol content in their excise policy soon,” said Director General, Brewers Association of India.
This major policy reform will help the Karnataka government optimise revenues while addressing public health goals of moderation, he said.
The reforms also propose to bring about changes in ease of doing business for the alcobev sector, such as full deregulation of government-administered price fixation, simplification of taxation framework, auto-renewal of manufacturing licences, online approvals, 24-hour operations for distilleries and breweries, and creating tourism opportunities around breweries.
Source from: https://hospitality.economictimes.indiatimes.com/news/operations/food-and-beverages/alcohol-in-beverage-based-duty-structure-will-help-revenue-maximisation-goal-of-karnataka-bai/130381978
