Karnataka introduces AIB-based excise system, revises liquor rates

The Karnataka government has implemented an Alcohol-in-Beverage (AIB)-based excise duty structure in the state and revised the rates of liquor.

In a press note issued on Sunday, the State Excise Department said the new taxation structure, which has been done for the first time in India in line with the 2026-27 Budget announcement of Chief Minister Siddaramaiah, was aimed at rationalising liquor pricing, making alcoholic beverages available at cheaper rates for consumers in Karnataka and aligning prices with neighbouring states, including Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala.

"For the first time in India, the AIB-based excise duty structure has been implemented in Karnataka from May 11, 2026. It is globally recognised as the gold standard for alcohol taxation," the department said.

 

Under the new policy, the government-administered price fixation has been completely deregulated, it said, and added that product placement within slabs has been left to the producers based on market considerations.

According to the government notification dated May 8, 2026, Indian Made Liquor (IML) slabs have been rationalised and reduced from the earlier 16 slabs to eight slabs.

The Excise Department said the restructuring had been carried out keeping in mind the availability of liquor at cheaper rates to the consumers of the state and ensuring that it is lower and relatively equal to that of the neighbouring states like Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala.

The revised rates notified by the Excise Department include popular Indian Made Liquor (IML) brands and beer brands, with prices varying according to slab structures, pack sizes and alcohol content.