The upcoming GST Council meeting on June 22 is likely to deliberate on the issue of using extra neutral alcohol for industrial use, bringing in a much-awaited clarity for the manufacturing sector.
“The law needs to be clear on alcohol, as it is still a state subject and the alcohol used for industrial use is different from alcohol used for human consumption,” a source who spoke to CNBC TV18 on the condition of anonymity said.
The council is likely to suggest that extra neutral alcohol used for industrial use in manufacturing, other than that for human consumption, should be subject to goods and services tax (GST) and therefore, it’d be treated as an industrial input.
“Council could bring in changes to categorically mention that extra neutral alcohol for industrial use should be taxed at 18% GST. To facilitate this, the council could suggest a new tariff and code to ease filing of returns and assessments in future,” the source added.
During the 52nd GST Council meeting in October 2023, the council had decided that GST on Extra Neutral Alcohol (ENA) used for the manufacture of alcoholic liquor for human consumption would be exempt from GST.
The 52nd GST Council meeting had also decided to reduce GST on Molasses from 28% to 5%.
Source: CNBC TV18
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