Beer industry welcomes Karnataka’s draft notification on Alcohol based tax structure

Welcoming the Karnataka Government’s draft notification on the new tax structure for the alcobev sector, the Brewers Association of India (BAI) has said the AIB taxation structure based on the actual amount of alcohol in a product is a watershed moment, which will not only optimise revenue but also meet public health goals of moderation.

The Karnataka Government on Saturday (April 18) 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 Alcohol-in-Beverage (AIB) based taxation structure besides announcing several other structural reforms.

These changes were earlier announced by Chief Minister K Siddaramaiah while presenting the Karnataka State Budget 2026–27 last month and are now in the process of notification.

The new rules, called the Karnataka Excise (Excise Duties and Fees Amendment) Rules, 2026, outline a taxation system which is based on the premise that the product to be taxed is the alcohol and not the water that accompanies it.

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