Industry groups have offered a mixed response to Karnataka’s proposed overhaul of its liquor taxation framework, with brewers welcoming the shift to an alcohol-based system while distillers cautioned that it could raise prices for mass-market consumers.
The Brewers Association of India described the move to an Alcohol-in-Beverage (AIB) framework as a “watershed moment” for the sector, saying it aligns taxation with both revenue objectives and public health goals.
However, the Karnataka Brewers and Distillers Association raised concerns about the potential impact on affordability, with shares of liquor companies including Tilaknagar Industries, Radico Khaitan and United Breweries rising by up to 3% on Monday following the release of the draft proposal.
The proposed changes form part of the Karnataka Excise (Excise Duties and Fees) (Amendment) Rules, 2026, issued under Section 71 of the Karnataka Excise Act, 1965 and published in the state gazette on April 18.
Under the proposed framework, spirits such as brandy, whisky, gin and rum would attract a uniform duty of ₹1,000 per litre of pure alcohol when supplied to distributors, while bottled beer would be taxed at the same rate when sold or imported into the state.
The government has invited objections and suggestions within seven days of the notification, after which the rules will be considered for finalisation.
