BANGALORE: In the Karnataka Budget 2023, Chief Minister Siddaramaiah has proposed an increase in the tax on alcohol, which will directly impact tipplers. The aim is to boost the state's tax revenue by raising the additional excise duty on liquor.
As the incumbent Congress government in Karnataka presents the state budget 2023, the Chief Minister plans to rely on revenue generated from alcohol sales to fulfill the five guarantees promised by the government.
It's no secret that excise, the tax imposed on liquor, plays a significant role in contributing to the state's finances. In fact, Karnataka leads the nation in terms of excise contribution as a share of its own tax revenues, standing at an impressive 22.9%. This figure surpasses the 22.3% contributed by Uttar Pradesh and exceeds the national average of 14.1%, highlighting the importance of excise revenue for Karnataka.
Looking ahead, the then Bommai government projected the excise collection to be Rs.29,000 crore for the fiscal year 2022-23. However, the department exceeded this projection and reached Rs.32,000 crore. In the ongoing fiscal year, Chief Minister Siddaramaiah, during his budget presentation, aims to raise the excise target to Rs.40,000 crore from the previously set target of Rs.35,000 crore.
It is reported that CM Siddaramaiah might consider increasing the additional excise duty (AED) on Indian-made foreign liquor (IMFL) by Rs.5 and revising the duty on beer as well. Considering the high average monthly consumption, with 47 lakh cases of IMFL (8.6 litres per case) and 35 lakh cases of beer (7.8 litres per case), such changes in duty rates will have a noticeable impact on both consumers and the state's revenue.
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