Karnataka Budget: Liquor duty revised again, third since Congress came to power

'The revenue collection target for 2024-25 to the Excise Department has been fixed at Rs. 38,525 crore,' the Chief Minister said.

The Karnataka government has decided to revise the tax slabs for Indian Made Liquor (IML) and beer, Chief Minister Siddaramaiah said on Friday. This is the third revision proposed by the Congress government since it came to power in May 2023.

“To rationalise the tax slabs and make them competitive with neighbouring states, the tax slabs for IML and beer will be revised,” the CM said during his 2024-25 state Budget speech.

At a subsequent press conference, the CM said that the tax slabs will be rationalised and premium liquor will become cheaper.

At the 2023-24 Budget, right after the Congress won the 2023 Assembly elections, the government hiked the Additional Excise Duty (AED) on IML by 20 per cent on all 18 slabs. AED on beer was increased from 175 per cent to 185 per cent.

The second revision came in January 2024 and the government proposed an AED increase on beer from 185 per cent to 195 per cent.

Lokesh K T, the president of the Association of Wine Merchants, Bengaluru, said that the announcement won’t benefit those in retail sales.

“If the margin on the purchase, which is currently at 10 per cent, would have increased, it would’ve benefited us,” Lokesh told DH. “If we calculate the margin on sales, it would be around 7.5-8 per cent, which is not enough to keep us afloat. The only saving grace from this Budget would be if the tax slabs are rationalised, the illegal entry of premium liquor — those costing over Rs 2,500 — from states where it is cheaper may be stopped, resulting in an increase in business for us.”

The Chief Minister said that in 2023-24, up to January, Rs 28,181 crore in tax revenue was collected from State Excise.

“The revenue collection target for 2024-25 has been fixed at Rs. 38,525 crore,” the CM said.

During last year’s Budget, the estimate was set at Rs. 36,000 crore, while the government earned Rs 29,920.37 crore in revenue in 2022-23.

Siddaramaiah also announced that all the services rendered by the excise department will be digitised. “Timelines will be fixed for various services, failing in which the approval will be made automative.”