NEW DELHI: The GST Council has decided to maintain the status quo on states taxing extra-neutral alcohol (ENA), which is used in the manufacture of alcohol for human consumption, a senior official said on Thursday .
The Council, chaired by Union Finance Minister Nirmala Sitharaman and composed of state counterparts, at its 43rd meeting on May 28, decided that for now the ENA would not be subject to the scope of application of the GST and that states would continue to collect value added tax (VAT) and sales tax on ENA.
GST Council co-secretary SK Rahman said the question of whether GST should be charged or whether state governments will continue to tax ENA has been discussed in about three or four meetings of the GST board so far.
ENA is a derivative of sugar cane molasses and is not an alcoholic liquor for human consumption but can be used as a raw material or input, after substantial processing and dilution, in the production of whiskey, gin, liqueur country, etc.
“To a large extent it has finally been decided, let’s not pick up on the issue over and over again. Let the status quo continue as state governments will continue to levy VAT and CST on the ENA, which goes into manufacturing. alcohol for This is a decision that was made at the 43rd GST Council meeting, ”said Rahman during an interactive session of the PHD Chamber of Commerce.
Currently, alcohol intended for human consumption or potable alcohol does not fall under the scope of the GST and states are free to levy taxes on them.
However, industrial alcohol falls under the goods and services tax (GST).
The pharmaceutical industry also uses ENA to make cough syrups and the cosmetics industry to make perfumes.
The pharmaceutical industry demanded that the ENA be included in the GST in order to qualify for the input tax credit.
However, states felt that if the ENA was subject to GST, it would be difficult to monitor alcohol production in the state.