New Delhi, April 22 -- Karnataka recently rolled out a draft policy to alter the taxation structure on liquor sold in the state. The policy proposed taxing liquor based on the actual volume of alcohol present in it - or the Alcohol-in-Beverage taxation system, a popular practice in western countries.

If implemented as such, the policy will lead to an increase in prices of budget liquor while premium spirits are expected to see a slight drop in prices, according to a report by brokerage firm Nomura.

Currently, Karnataka levies the highest tax on liquor at 83% making the state one of the most expensive places to purchase liquor. The draft policy is expected to rationalise the prices by bridging the gap between budget and premium liquor. ...