India: Karnataka government decides to increase taxes on beer

That pint of beer is set to become more expensive as the State government has decided to increase taxes on Bengaluru�s most popular alcoholic beverage. Chief Minister Kumaraswamy, in his budget speech, announced that the additional excise duty levied on beer will be increased from 150% to 175%, while that on draught beer is set to rise from 115% to 150%, The Hindu reported on February 8.

Excise duty on low alcoholic beverages is up from ₹5 to ₹10 per bulk litre, while the additional excise duty is up from 122% to 150%.

Manu Chandra, Chapter Head, Bengaluru, National Restaurants Association of India, said that this would make things more expensive for the consumer. �However, it�s unlikely to affect consumption patterns as people have their preferences,� he said. He noted that the Karnataka government was taxing excise heavily and it was becoming increasingly expensive to buy alcohol in the State.

A visit to the local micro-brewery will also get more expensive as the State government has decided to increase both excise and additional excise duty on beer brewed in microbreweries. Excise duty will increase from ₹5 to ₹10 per bulk litre, while additional excise will go up from ₹12.50 to ₹25 per bulk litre.

Small micro-breweries � there are 52 in Karnataka, of which 49 are in Bengaluru � may find themselves more vulnerable.

Nikhil R. Ashwath, an engineering student who visits microbreweries regularly, said, �The cost of beer at these breweries is already high. People are likely to shift to regular beer if prices increase,� he said.

An Excise Department official, however, pointed out that the excise and additional excise duty for beer at a microbrewery were lower than it is for regular beer as the State government wanted to encourage microbreweries. A microbrewery is a brewery which has an installed capacity of not more than thousand litres per day. They have to pay excise duty for 50% of their annual installed capacity.