Karnataka budget: CM robs some fizz off beer

BENGALURU: Beer guzzlers will have to cough up more money as the drink is going to be expensive with chief minister H D Kumaraswamy proposing to hike additional excise duty (AED) on it in n his budget.

HDK, who had hiked AED on Indian made liquor (IML) across the price slabs last year, proposed to hike AED on beer from 150 % to 175 % for 2019-20. As a consequence, consumers, who are now paying Rs 125 for a bottle of beer, will have to pay Rs 136.50 after the duty hike.

At present, a bottle of beer with a base price of Rs 46 attracts excise duty of Rs 10 and AED of 150% ( Rs 69), adding up to the selling price of Rs 125. Now, if the AED is hiked to 175 % (Rs 80.50), the selling price will be Rs 136.50.

The chief minister also proposed to hike AED on draught beer from 115% to 150 %. Beer brewed at micro-brewery will also be expensive as excise duty on it is set to go up from Rs 5 to Rs 10 per bulk litre and AED on it will go up from Rs 12.50 to Rs 25.

Excise duty and AED on low alcoholic beverages like Breezer has been proposed to be hiked from Rs 5 to Rs 10 and from 122 % to 150 % respectively.

The CM has fixed the revenue target from liquor sales at Rs 20,950 crore for 2019-20. The target was Rs 19,750 crore, which Kumaraswamy said the government would meet by the end end of March this year.


The industry representatives said they were seeking an hike in basic price of liquor, but the CM has hiked duty instead.

“It is more than three years since basic price of liquors was hiked. Since then our production cost has increased,” said Shivalingaiah, secretary general of Karnataka Brewers & Distillers Association. “The duty hike benefits the government exchequer, while the industry is left high and dry.”