Overview
- The state government inserted reduced tax provisions for low‑alcohol beverages into the draft Finance (No. 3) Bill now scheduled for introduction in the Assembly, framing the change as a tax‑rationalisation rather than an immediate market approval.
- The Finance text follows rates set in the 2025‑26 budget: 120 percent for drinks with 0.5–10% ABV and 175 percent for drinks above 10% and up to 20% ABV.
- The CPI(M) has accused Chief Minister V. D. Satheesan's administration of hastening the file and granting concessions that it says will cost the treasury about Rs 600 crore and favor large distilleries.
- The proposal has split the ruling coalition, drawn public criticism from the IUML and religious and anti‑liquor groups, and prompted internal dissent within Congress demanding the tax clauses be withdrawn.
- Government sources and the bill itself note that passage would not by itself allow sale of new products because separate approval from the Excise Department and a gazette notification are required, while coverage differs on whether the change is mainly a fiscal tweak or a policy shift that could affect public health and farmer‑industry interests.