Liquor was earlier taxed based on content benchmarked to global standards rather than the exact alcohol content. While announcing the state Budget for the year 2026, Chief Minister Siddaramaiah proposed to revise this system and change it to the actual alcohol content present in the final product rather than the total volume, with the transition being phased over 3-4 years.
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Under the new framework, tax rates will be determined by the alcohol content of each beverage rather than broader global classifications. The revised structure is scheduled to take effect from April 2026.
Govt to no longer set alcohol prices
CM Siddaramaiah, presenting the state Budget, also announced that the government will no longer fix liquor prices. Under the new policy, pricing will be deregulated, allowing manufacturers to set prices in slabs based on market competition
Shares of Bengaluru-headquartered United Spirits jumped 7% to trade at Rs 1,417 apiece on the NSE, while those of United Breweries and Tilaknagar Industries gained around 5%. Radico Khaitan shares rallied 6%, Sula Vineyards rose 2%, Allied Blenders and Globus Spirits jumped 3%, as seen at around 1.30 pm.
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Liquor stocks had taken a heavy beating earlier last year in May when the Karnataka government implemented a hike in Additional Excise Duty (AED) on Indian-Made Liquor (IML) and beer, marking the fourth such increase in just two years.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)