Karnataka Becomes India's First State to Adopt AIB Liquor Duty Structure

Karnataka shifts to India's 1st alcohol-in-beverage duty structure; Revised liquor and beer prices announced

Bengaluru, May 17

The changes come under the newly implemented Alcohol-in-Beverage (AIB) based excise duty structure, making Karnataka the first state in India to adopt such a system.

The shift to the AIB-based structure was initially announced by the Chief Minister during the 2026-27 Budget speech. Following up on that commitment, the government issued Notification No. FD 14 PES 2026 on May 8, 2026, amending the Karnataka Excise (Excise Duties and Fees) Rules, 1968.

The new rules officially came into effect on May 11, 2026. Under the new rules, the government has rationalised liquor and beer product prices across the board.

The revised MRPs apply to all products manufactured after May 11, 2026. Crucially, the AIB structure deregulates government-administered price fixation. Instead of the state rigidly setting prices, producers now have the flexibility to place their products within specific pricing slabs based on market considerations and alcohol content.In a letter dated May 16, 2026, addressed to the Commissioner of the Department of Information and Public Relations, the Excise Commissioner's office stressed the importance of public awareness regarding the new pricing.

The department has requested the immediate publication of the revised MRP list for popular liquor and beer brands, detailing both prices and sizes, in leading state-level Kannada and English newspapers.

The new AIB structure marks a historic shift toward deregulation in the Indian liquor industry, balancing market-driven pricing for producers with structured slabs intended to rationalise costs for the consumer.

— ANI