Karnataka’s new excise regime calibrates taxes to social cost of alcohol

The social cost of alcohol consumption — ranging from health burden and domestic violence to accidents — is the fundamental reason behind Karnataka government’s decision to move to Alcohol in Beverage (AIB) regime from the complicated slab-based excise duty structure based on price, notes the draft report on Karnataka Excise Reforms submitted by the K.P. Krishnan-headed Resource Mobilisation Committee.

Under the new regime, higher alcohol content liquor which was so far cheaper, would increase marginally this year, and become costlier over the next three to five years.