In India, the power to levy taxes on alcoholic beverages is vested solely with the States and not with the Union. Extra Neutral Alcohol (“ENA”), a key input for the alcoholic beverages industry, was in dispute as subject to the levy of GST, while the final output, being alcoholic liquor for human consumption, is excluded from the ambit of GST and is instead subjected to State taxes.
In a significant move for the spirits industry, GST Council could propose a scheme enabling central and state tax authorities to write off the recovery of past tax dues on Extra Neutral Alcohol (ENA), potentially offering much-needed relief to the sector.
GST Council is planning amendments to GST laws concerning extra neutral alcohol (ENA), a highly pure form of alcohol used in liquor production but not for direct consumption. These changes aim to clarify that ENA should not be subject to GST, potentially bringing much-needed relief to the spirits industry by avoiding dual taxation.
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 wait for liquor companies to get clarity on taxation of Extra Neutral Alcohol (ENA), used for distilling alcoholic liquor…
