After back-to-back hike in beer prices, Karnataka govt now proposes to double annual license fee

Bengaluru: Nearly after nine years since the last revision, the state government, on Friday, released a draft notification proposing an increase in license fee for distilleries, breweries, and other alcohol selling establishments by as much as 100%.

For instance, the annual license fee for hotel bars in large city corporations (population over 20 lakhs) is now pegged at Rs 17 lakhs per year, doubled from the previous fees of Rs 8.5 lakhs. Similarly, license fees are proposed to be doubled for CL4 (clubs) CL2 (retail shops), and CL9 (bars and restaurants). The license fee for distilleries and warehouses has gone up to Rs 90 lakhs from Rs 45 lakh. Breweries will also face a similar increase with license fees rising from Rs 27 lakhs to Rs 54 lakhs.

Sources said that this was mostly a revenue mobilisation effort.

“It has been nine years since the last revision. It was expected and it is mostly a revenue mobilisation effort,” a senior official from the finance department said.

Apart from the license fee, the government has also proposed a number of other changes.

Other key revisions include: Increase in security deposit for bottling units from Rs One lakh to Rs two lakhs, application fees has been modified across different manufacturing categories, with craft breweries now required to pay Rs 25,000 and wine manufacturers Rs 1,000.

The changes will be implemented by making amendments to a number of Acts including Karnataka Excise (Bottling of Liquor) Rules, 1967, Karnataka Excise (Brewery) Rules, 1967, Karnataka Excise (Distillery and Warehouse) Rules, 1967, Karnataka Excise (Lease of the Right of Retail Vend of Beer) Rules, 1976, Karnataka Excise (General Conditions of Licences) Rules, 1967, and Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968.

The draft related to the amendment was published on Friday and the government will accept objections over the next seven days. The changes will come into effect from July 1, 2025.