Tipplers in Karnataka will soon have to pay more to buy alcohol as an additional excise duty (AED) of 6% will be levied on the sale of liquor. The revised prices will come into effect once the new stock arrives in the market.
Karnataka on Monday, May 4, witnessed a record sale of liquor amounting to Rs 45 crore as wine shops reopened across the state after over a month. Liquor stores, bars and pubs had been shut all over the country in the wake of the novel coronavirus lockdown.
Karnataka excise minister confirms liquor price rise
The Karnataka government, in its state budget for the fiscal year 2020-21, had proposed a hike in excise duty on liquor by 6% on all slabs of Indian-made liquor (IML) and the revised prices were to come into effect from April 1. However, the changes cannot be enforced as old stocks remained unsold due to the COVID-19 lockdown.
"All liquor brands will cost more from next week when new stocks arrive for sales, as the 6 per cent increase in additional excise duty will be added to their maximum retail price," said state excise minister H. Nagesh, adding that the old stocks are expected to finish within this week owing to the huge surge in demand.
He further informed that the state has suffered a loss of almost Rs 3,000 crore worth excise duty due to the closure of liquor shops for the past 40 days. However, the state government is now expecting to recover around 50 per cent of the amount from the increase in excise duty on alcohol and growth in liquor sales in the months to follow.
Details of price hike
As proposed by Chief Minister B S Yeddyurappa in the state budget, the additional excise duty will rise from ₹144 to ₹153 per bulk liter in the under ₹499 category. For IML priced at over ₹15,000 per carton, the additional excise duty will go up from ₹3,370 to ₹3,572 per bulk liter.
The increase in excise duty on liquor will allow the Karnataka government to boost the otherwise dwindling revenue collection considering that the state sold 3.9 lakh liters of beer and 8.5 lakh liters of IML on the very first day of reopening of wine shops.