The Karnataka government has relied on excise to fund its schemes with the budget hiking the duty on Indian Made Liquor (IML) by 20% while the duty on beer has been increased from 175% to 185%.
While the budget document spoke of the hike in terms of carton box, officials in the department said the maximum retail price (MRP) of all brands of liquor will go up by 20%. For beer lovers, the hike means one third of the price they pay to a bottle of beer goes to the government.
Wine merchants said a clearer picture will emerge when they get the notification from the government. “We expect the cheapest liquor to go up by Rs 10 while the premium brands will get much costlier depending on the MRP,” Lokesh K T, president of Association of Wine Merchants, Bengaluru.
Coming next only to commercial tax, excise contributes to 20% of the state’s total revenue and has proved reliable by delivering more than expected. The Rs 36,000 crore target announced in the budget is a Rs 7,000 crore jump compared to the target set in the 2022-23 budget.
As per the Excise Department, the IML brings 84% of the total revenue with beer contributing 12.89%. The department had earlier this year set Rs 35,000 crore as target for 2023-24. “The new target can be achieved. It will require additional work,” an official said.
The Siddaramaiah-led government had made similar leaps in revenue collection during 2013-18. Measures like allowing the liquor shops, pubs, bars and restaurants to remain open till 1 am in the night during the weekends. The government had planned to extend the deadline for all days.
S Guruswamy, president of state Federation of Wine Merchants Association, said the hike in excise duty will not benefit the shops. “The higher price will only help the government. We had asked for a higher margin but the government has not given anything,” he said.