The Karnataka government has launched an innovative Alcohol-in-Beverage (AIB)-based excise duty structure, effective from May 11, 2026. This new taxation model, the first of its kind in India, was announced in the 2026-27 Budget by Chief Minister Siddaramaiah. The initiative aims to rationalize liquor pricing, making alcoholic beverages more affordable for consumers in Karnataka. The Excise Department noted that this restructuring will help align liquor prices with those in neighboring states such as Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, and Kerala. The government has deregulated price fixation, allowing producers to determine product placement within the new pricing slabs based on market conditions. The number of Indian Made Liquor (IML) pricing slabs has been significantly reduced from 16 to 8, enhancing flexibility for producers while ensuring lower prices for consumers. The revised rates will apply to popular IML brands and beer, with pricing varying according to the new slab structure, pack sizes, and alcohol content.