Kerala Government's Low-Alcohol Beverage Tax Cut Sparks Political Storm
The Kerala government, led by Chief Minister V.D. Satheesan, proposed revised tax rates on low-alcohol beverages (0.5–20% alcohol by volume) in its 2026-27 budget, reducing them from 251% to 120% and 175%. The opposition Left Democratic Front (LDF) alleges corruption and revenue loss of ₹600 crore, while internal divisions emerge within the ruling United Democratic Front (UDF) and church bodies criticize the move. Former Excise Minister M.B. Rajesh accused the UDF of favoring a Karnataka-based liquor lobby and undermining anti-alcohol stances.
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Revised Low-Alcoholic Beverages Tax Rates Included in Kerala Finance Bill Amid Political Row
The Kerala government has included revised tax rates on low-alcoholic beverages in the Finance (No. 3) Bill, 2026, set to be introduced in the State Legislative Assembly on July 1. The rates, announced by Chief Minister V.D. Satheesan in the Revised Budget, are 120% for beverages with 0.5% to 10% alcohol by volume and 175% for those above 10% up to 20%. The amendment amends the Kerala General Sales Tax Act, 1963, but will only take effect upon government notification in the official gazette. The move has sparked political controversy, with the Opposition Left Democratic Front (LDF) alleging it promotes alcohol addiction. Internal differences also emerged within the ruling United Democratic Front (UDF). Excise Minister M. Liju clarified that the sale of such beverages would depend on the yet-to-be-finalized liquor policy and would not be implemented immediately. The LDF government had originally introduced low-alcoholic beverages as a category in its 2022-23 liquor policy.
The Hindu: Latest News today from India and the World, Breaking news, Top Headlines and Trending News Videos.Kerala's low-alcohol liquor tax policy sparks political storm amid corruption allegations
The Kerala government's revised budget for 2026-27, presented by Chief Minister V.D. Satheesan, has ignited a major political controversy by reducing sales tax on low-alcohol beverages. The new policy sets a 120% tax for beverages with 0.5-10% alcohol content and 175% for 10-20% content, down from the standard 251% on regular liquor. The opposition Left Democratic Front (LDF) alleges corruption, claiming the move benefits a specific company that had previously approached the LDF government with a similar demand. They estimate an annual revenue loss of ₹600 crore. The controversy has also exposed divisions within the ruling United Democratic Front (UDF), with senior Congress leader V.M. Sudheeran and AICC general secretary K.C. Venugopal expressing disapproval, arguing the policy contradicts the party's election manifesto pledge to combat alcohol abuse. Church bodies have also criticized the decision.
The Hindu: Latest News today from India and the World, Breaking news, Top Headlines and Trending News Videos.Kerala liquor tax row: CPI(M) accuses CM Satheesan of making ‘incorrect’ statements, seeks clarification
CPI(M) leader and former Excise Minister M.B. Rajesh accused Kerala Chief Minister V.D. Satheesan of making factually incorrect statements in the Assembly regarding a proposal to reduce tax on low-alcohol beverages. Rajesh rejected Satheesan's claim that the proposal originated during the previous LDF government's tenure when current CPI(M) state secretary M.V. Govindan held the Excise portfolio. Rajesh clarified that the 2022-23 liquor policy only redefined low-alcohol beverages and did not include any tax reduction. He demanded the Chief Minister withdraw his statement and provide clarification. Rajesh also alleged the current UDF government acted secretly on the tax proposal, noting the file remained with the CM for 24 days before clearance. He further compared bar and liquor sale statistics between UDF and LDF tenures, challenging the CM to close bars if the previous UDF policy was correct.
The Hindu: Latest News today from India and the World, Breaking news, Top Headlines and Trending News Videos.Row over tax rates of low-alcohol beverages: UDF will decide, says Chief Minister V.D. Satheesan
Kerala Chief Minister V.D. Satheesan stated that the final decision on tax rates for low-alcohol beverages will be made by the United Democratic Front (UDF) coalition, calling it a political decision. The controversy arose after the Revised Budget proposed lowering taxes on low-alcohol beverages (0.5% to 20% alcohol by volume), with rates set at 120% for 0.5-10% v/v and 175% for 10-20% v/v. Satheesan noted that the previous Left Democratic Front (LDF) government had created the low-alcohol beverage category in its 2022-23 liquor policy, and the current UDF government only fixed tax rates—which he claimed are the highest among Indian states for such products. The LDF opposition protested, while the Chief Minister accused them of hypocrisy, citing the LDF's increase in the number of bars from 28 to over 900 during its tenure.
The Hindu: Latest News today from India and the World, Breaking news, Top Headlines and Trending News Videos.Kerala’s Former Excise Minister Slams UDF Over Low-Alcohol Beverage Tax Cut
Former Kerala Excise Minister M.B. Rajesh (CPI(M)) accused the UDF government of reducing taxes on low-alcohol beverages to increase alcohol availability and benefit a Karnataka-based liquor lobby. He claimed the LDF had restricted production to fruit and agricultural products, while the UDF now permits spirit-based production, enabling corruption and social harm. Rajesh demanded Chief Minister V.D. Satheesan disclose any payments linked to the decision. He detailed a new tax structure: 120% for drinks up to 10% alcohol and 175% for those up to 20%, which he argued will boost corporate interests and cause revenue loss, contradicting the UDF's earlier anti-alcohol stance.
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