The GST Council clarified that it cannot tax alcohol because it is a state matter: Chairman of Som Distilleries

During the GST Council Meeting, it was decided that corporate guarantees offered by a company’s director would be exempt from Goods and Services Tax (GST). However, if a holding company gives a corporate guarantee, the parent company will levy GST at the rate of 18% on the full guaranteed amount.

 GST Council


On Saturday, the Goods and Services Tax (GST) Council decided to cut the GST rate on molasses from 18% to 5% and to remove alcohol meant for human use from this taxation.

“The alcohol that we use, the GST department has been disputing and putting the tax on the alcohol that we use,” said JK Arora, Chairman of Som Distilleries. However, one thing is apparent from the Indian constitution: the manufacture of spirits, storage, transportation, and licencing are all within the purview of the state. So I’ve been saying since the beginning that the GST Council cannot levy a tax on alcohol because it is a state subject.”
“This is a good clarification and a lot of litigation will end since they are going to issue the clarification also,” he said.

The GST council, on the other hand, decided to keep the GST on extra neutral alcohol (ENA) for industrial usage.
During the press conference, Finance Minister Nirmala Sitharaman emphasised the Allahabad High Court’s finding that putting a tax on ENA was primarily the responsibility of the Centre and the GST Council.
However, she stated that the GST Council has chosen to relinquish the prerogative to the states. “If the states want to tax it, they can do so.” “If the states want to leave, they are welcome to do so,” she remarked.

Also Read: RBI extended deadline to exchange RS 2000 till October 7/


Leave a Comment