The Commissioner of State Tax & Excise, Himachal Pradesh has clarified that the Extra Neutral Alcohol ( ENA ) used to manufacture alcoholic liquor human consumption would attract 18 percent GST. In a letter addressing the officials, the Commissioner Rajiv Sharma directed the suppliers of ENA to get registered with the new tax regime.
On 5th August 2017, the GST Council had decided to obtain a legal opinion of the Attorney General of India regarding the taxability ENA under the GST regime.
In response, the Advocate General had opined that “ENA typically contains 95% alcohol by volume and as such is not fit for human consumption. Under article 246A (1) read with 366(12A), GST cannot be levied on the supply of “alcoholic liquor for human consumption”. ENA that is used for the manufacture of alcoholic liquor does not supply for the purpose of human consumption it is not consumed directly but goes through a process of manufacture.”
He, therefore, opined that the judgment of the court in “Bihar Distillery” does not denude the Centre or the States of the power to levy GST on EVA that is used to manufacture alcoholic liquor human consumption.
“In view of the above, it is informed that GST will be applicable on the supply of ENA which is used for the manufacturing of alcoholic liquor for human consumption. Accordingly, the suppliers of ENA are required to be registered under the GST Act & GST is to be levied on the supply of ENA. It is further informed that as per entry no. 25 of Schedule-III of the notification no. 01/2017 State Tax (Rate) dt. 30.06.2017 & 01/2017- Central Tax (Rate) dt. 28.06.2017 the supply of ENA is exigible to be taxed a, 18% GST.”
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