Hefty penalties imposed as Excise Department targets illegal liquor pricing
Bengaluru: In a major crackdown on widespread violations, the Karnataka Excise Department has intensified action against liquor outlets accused of charging above the Maximum Retail Price (MRP), a practice that has long burdened consumers across the state.
Officials have collected nearly Rs 12 crore in penalties from retail liquor shop owners found guilty of inflating prices and exploiting customers. The Excise Department remains one of the highest revenue-generating arms of the state government.
While successive governments routinely increase the Additional Excise Duty (AED) to bridge fiscal gaps, liquor shop owners have been allegedly running a parallel system of illegal earnings by selling alcohol at prices well above the permitted MRP.
Karnataka has 13,972 licensed liquor outlets, including MSIL (CL-11C) stores and CL-2 retail shops. Legally, all these outlets must strictly sell liquor at MRP. However, investigations show that several owners have adopted unlawful shortcuts to secure higher profit margins.
Even government-run MSIL outlets—expected to strictly follow rules—have been reported for violating pricing norms. A major concern flagged by officials is the absence of price display boards. Despite mandatory guidelines, most retail shops do not display rate charts, leaving customers vulnerable to arbitrary pricing.
In a few shops where rate lists exist, only low-priced brands are mentioned, enabling outlets to overcharge for premium varieties. The Excise Department’s own website also lacks updated MRP information, making transparency even more challenging.
Customers purchasing liquor for takeaway (parcel) from CL-2 shops or MSIL stores are entitled to pay only the printed price. However, complaints reveal that many outlets are adding illegal charges such as “cooling fee” or miscellaneous service costs.
Bars, restaurants (CL-9), boarding houses (CL-7) and hotels, where on-premise consumption is permitted, levy service charges and additional taxes. While this is legally allowed to some extent, several establishments have reportedly gone beyond permissible limits, inflating bills for customers.
Moreover, pubs officially licensed to sell only beer have been found serving hard liquor. Clubs (CL-4), star hotels (CL-6A), and restaurants with attached bars are allegedly running unauthorised “attached pubs,” flouting licence restrictions to illegally boost revenue.
The Excise Department has now intensified statewide inspections, targeting every category of liquor licence to curb violations. Officials say the crackdown will continue until pricing transparency is ensured and consumers are protected from exploitation.
