Goa, May 17 -- Karnataka has become the first state in India to introduce an Alcohol-in-Beverage (AIB)-based excise duty system, replacing the earlier bulk litre-based taxation model. The new framework came into effect on May 11 and aims to restructure liquor taxation according to alcohol content while keeping prices competitive with neighbouring states.

The Karnataka excise department described the reform as a globally recognised taxation model that directly links excise duty to the percentage of alcohol in beverages rather than overall volume. The move was first proposed by the K.P. Krishnan-led Resource Mobilisation Committee and later announced by chief minister Siddaramaiah in the 2026-27 state budget.

Under the revised structure, ...