The Commissioner of State Tax & Excise, Himachal Pradesh, on Saturday said that a final decision on the issue of the taxability of Extra Neutral Alcohol ( ENA ) will be taken as per the decision of the GST Council.
On 1st August, the Commissioner Rajiv Sharma had clarified that the ENA used to manufacture alcoholic liquor human consumption would attract 18 percent Goods and Services Tax.
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.”
Following the opinion of the Attorney General, the Commissioner, in a letter addressing the officials also directed the suppliers of ENA to get registered with the new tax regime.
According to sources, the GST Council, in its last meeting, couldn’t reach a conclusion on this matter as most of the States were opposing the decision.
In the present communication, it was clarified by the Commissioner that “this is in continuation to letter No 12-13/2018-19-EXN-GST-23205-23223 dated 01-08-2018, it is clarified that the above-mentioned communication was meant to share the opinion furnished by solicitor general Govt of India. It is further pointed out that the issue of levy of GST on ENA is subject to the final decision on the Item No 7(xi) of the 20th meeting of GST Council and will be implemented on receipt of appropriate notification/direction from GST council.”
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