Karnataka craft beer and microbrewery rules, as of October 2026
Karnataka licenses microbreweries inside bars, clubs and hotels. In May 2026 it also changed how it taxes beer. Here is what the rules allow today, where the sources run thin and what to confirm before you sign a lease.
The microbrewery licence
Karnataka runs microbreweries under the Karnataka Excise (Brewery) Rules, 1967. A microbrewery is not a standalone business here: it sits inside premises that already hold a liquor licence. Compliance summaries of the rules list bars (CL-9), clubs (CL-4), hotels (CL-7) and star hotels (CL-6A) as the host licences (summary of the rules).
The licence fee was reset by an amendment notified on 17 August 2024: ₹2 lakh a year for grant or renewal, plus an additional fee of 15% of that, with excise duty and additional excise duty payable in advance on top (notification summary). The same amendment replaced the words liquor and beer with draught beer in the microbrewery rule.
On size, a draft amendment published on 10 January 2023 defined a microbrewery as one with installed capacity of no more than 3,65,000 litres a year, in a place of at least 6,500 sq ft built-up area with a dining hall and parking (draft rules). That is 1,000 litres a day. Treat the draft figures as a guide and confirm the notified text with the excise office.
Draught, on your own premises only
The same draft describes a microbrewery as a place where draught beer is made and served to customers for consumption within the premises. We found no notification that lets a Karnataka microbrewery sell kegs, cans or growlers to other bars or shops. Compare Maharashtra, where a February 2024 amendment lets microbreweries supply retail licence holders in kegs (our Maharashtra guide).
The state's 2026-27 excise policy, announced in March 2026, says it keeps separate licensing for microbreweries and mentions draught beer supply permissions, without giving terms (Ambrosia India, 10 March 2026). Until a notification spells those terms out, plan on selling every litre across your own counter.
That shapes the brewhouse. With no packaging line, the serving tanks are the shop window. A bright tank held at 2 to 4 °C on CO2 top pressure is the whole inventory, so batch size has to match what the floor can pour before the beer tires.
Duty: the May 2026 switch
Karnataka changed beer tax several times in 2025. An amendment to the duty rules notified on 8 January 2025 raised beer rates from 20 January (notification summary). Additional excise duty on beer then rose from 195% to 200% later in 2025, after a draft had proposed 205%.
The bigger change came in 2026. The state moved from the bulk litre model to duty based on alcohol in beverage, effective 11 May 2026 (NewsX, 19 May 2026). The April 2026 draft said beer up to 5% alcohol pays a lower rate than beer between 5% and 8% (The Hans India, 22 April 2026). We could not find the final per litre rates for beer or for microbrewery draught in a public source. Get the current schedule from the excise office before you price a pint.
Under the same policy the government stopped fixing retail prices from April 2026, so manufacturers set prices within the tax structure.
KSBCL and the route to bars
The Karnataka State Beverages Corporation (KSBCL) is the sole wholesale channel. Every retailer and bar buys from it (licensing guide, reviewed August 2026). A packaged craft brand reaches bars only by brewing at a licensed brewery and selling through KSBCL, with its labels registered and priced in that system.
A microbrewery sits outside that route, because its beer never leaves the premises. Duty is paid in advance on the microbrewery's own production instead.
Pouring craft beer without a brewery
A restaurant or pizzeria that wants craft beer on tap needs a bar licence, usually CL-9. New CL-9 licences have been frozen for decades, so newcomers buy an existing one or bid in the CL-9A e-auctions run through 2026 (licensing guide).
To sell bulk beer it also needs a lease of the right of retail vend of beer. A June 2025 amendment, effective 1 July 2025, set ₹22,500 a year for bulk beer when the holder already has a CL-4, CL-6A, CL-7 or CL-9 licence, against ₹45,000 for others, valid for five excise years (notification summary).
The kegs come from KSBCL, which means beer from a licensed brewery with a registered draught label. They cannot come from the brewpub down the road.
Contract brewing
Karnataka has no separate contract-brewing licence that we could find. A brand without its own plant has its beer made at a licensed brewery, which registers the label and sells through KSBCL. How declared price and duty are worked out for a tolled beer is a question for the excise office in writing. Our contract brewing guide covers the commercial side.
What to check before you commit
Confirm three things in writing: the current per litre duty on draught under the May 2026 structure, whether any draught supply permission now covers microbreweries and the built-up area your site needs. This guide is a working summary dated October 2026, not legal advice. Rules and rates change by notification, so read the latest one or work with a licensing adviser.
Common questions
Can a Karnataka microbrewery sell kegs to other bars?
We found no notification that allows it. The rules describe draught beer served for consumption within the premises, so check the current text with the excise office.
What does a microbrewery licence cost in Karnataka?
An amendment notified on 17 August 2024 set ₹2 lakh a year plus an additional 15% fee, with excise duty and additional excise duty paid in advance on top.
How is beer taxed in Karnataka now?
From 11 May 2026 the state taxes on alcohol in beverage rather than bulk litres, with a lower band for beer up to 5% alcohol. Confirm the current per litre rate with the excise office.
Where do bars in Karnataka get craft beer kegs?
From KSBCL, the sole wholesaler. The beer must come from a licensed brewery with a registered label. The bar also needs a bulk beer lease alongside its CL-9 licence.
