Premium pours trump price pain as K’taka excise revenue booms

Bengaluru: Liquor sales in Karnataka continue to boom, with demand for premium spirits showing an uptick despite higher prices, repeated excise duty hikes and inflation. Consumers are increasingly moving from lower-priced products to premium brands, contributing to a surge in revenue. Excise minister R B Timmapur said liquor revenue continues to surge, with the excise department collecting Rs 33,371 crore between April 1, 2025, and Jan 31, 2026, exceeding the target by a whopping Rs 3,910 crore.
Karnataka currently has the highest liquor tax on premium brands in the country at 83%, making it the most expensive state to buy alcohol, with significant hike in excise duty since 2020. In 2020, duty was raised twice — by 6% in the budget in March and another 11% in May. In 2023, excise duty on liquor was increased by 20% across slabs, while additional excise duty on beer was raised by 10%. In 2025, the additional excise duty on beer was raised twice by 10% each time, taking the total hike to 20%. Timmapur said the initial excise revenue target of Rs 40,000 crore for 2025-26 was projected to be surpassed. "We are now estimating the excise collection to be more than ₹43,000 crore by March-end," he added. "Tighter enforcement and measures to prevent revenue leakage helped boost collections, along with vigilance against illicit liquor and drugs," Timmapur explained, adding that excise remained a key contributor to state finances, with receipts higher than the same period during the last fiscal. Officials said excise remains among the largest contributors to the state exchequer. Timmapur denied corruption allegations linked to transfers and licensing, citing digitisation and procedural reforms. He said the department renewed more than 14,101 licences within 48 hours through online counselling and extended the renewal period from one year to five years to reduce corruption. He said disciplinary action was taken against 158 officials, with 85 cases at the department level, 19 at the govt level and 54 with the Lokayukta. GFX Excise duty hikes in K'taka in last 5 years Year Measure Details 2020 Additional excise duty on liquor Raised by 6% in budget and 11% in May 2023 Additional excise duty on liquor Raised by 20% across all slabs 2023 Additional excise duty on beer Raised by 10% 2025 Additional excise duty on beer Raised twice -- by 10% in Jan, and another 10% in April