Karnataka govt proposes 10% excise duty hike on beer; 2nd rise in 4 months

The government has also decided to do away with a fixed Rs 130 excise duty for lower-end beers and going ahead, 205% AED will apply to all beer brands.

For the second time in four months, the state government has proposed to hike the price of beer.

The government, in a draft notification, has proposed to increase the additional excise duty (AED) on beer by 10 per cent and this could lead to an increase in beer prices by up to Rs 50 per bottle, sources said.

According to the draft notification, AED on bottled beer manufactured in Karnataka or imported into the state will be hiked by 10 percentage points from 195 per cent to 205 per cent.

The government has also decided to do away with a fixed Rs 130 excise duty for lower-end beers and going ahead, 205 per cent AED will apply to all beer brands.

Sources in the finance department told DH that the hike was decided based on the beer prices in the neighbouring states. “Beer prices in most of our neighbouring states are higher than ours. Hence, there was some potential to increase the revenue by increasing the prices,” one of the officials said.

The official, however, added that the government may not increase the prices of beer again anytime soon since there have been back-to-back increases in prices.

While the exact increase in price will depend on the brand, the rise could lead to a dip in sales, sellers opined.

“Already, with the previous increase in rates, the sales have come down significantly. In summer, beer sales are usually high. But this year, that is not the case. We are seeing a significant reduction in sales,” said a brewery owner from North Bengaluru.

The draft notification was released on Tuesday and the public can raise objections against the notification within seven days.

In January, the government had hiked the AED on beer from 185 per cent to 195 per cent.