Karnataka to switch to alcohol by-products (AIB) based taxation
From April 2026 the state will begin implementing the new AIB-based duty; broader price deregulation and related changes will be phased in over the following years.
The move, announced by Chief Minister Siddaramaiah, is meant to update an old pricing system and help boost state revenue.
In the new system, liquor taxes will be based on
Liquor taxes will now be based on alcohol content, aiming for ₹45,000 crore in revenue for 2026-27, compared with ₹36,492 crore collected up to February in FY 2025-26.
The number of price slabs drops from 16 to just eight, and producers can set their own rates within certain bands.
There's some worry about possible price hikes, but the rollout will be gradual over a few years to keep things stable.
Other key changes in the process
Manufacturing licenses will be auto-renewed (renewal period not specified); label approvals, CL-5 and RVB licenses will be auto-generated upon online self-declaration and payment of fees, with deemed approval and no manual intervention.
Plus, liquor transport gets techy: geo-fenced e-locks will track shipments instead of physical escorts, making things more transparent and easier to monitor.