GST Council cuts Tax on Molasses to 5%, Exempts Distilled Alcohol from Levy

GST Council cuts Tax on Molasses to 5% - Exempts Distilled Alcohol from Levy - TAXSCAN

The GST Council has decided to reduce GST on molasses to 5 per cent, from 18 per cent, and exempted distilled alcohol for human consumption from the levy.

It was noted that the extra neutral alcohol (ENA) for industrial use will continue to attract Goods and Services Tax (GST). The right is vested on the GST Council to tax Extra Neutral Alcohol (ENA). The GST Council has seeded the right to tax ENA to the states GST rate notification will be amended to create an entry of ENA for industrial use. Entry of ENA for industrial use shall attract 18% tax. The State Government is still free to impose SGST on the same.

On a petition challenging the Goods and Service Tax (GST) Council power to change the classification of a commodity and increasing the GST rate, the Allahabad High Court stayed the effect and operation of Central Board of Indirect Taxes & Customs (CBIC) Circular and notice as an interim relief. A division bench comprising Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava held that “the effect and operation of the Circular dated 6.10.2021 (Annexure 2 to the writ petition), impugned show cause notices shall remain stayed provided the petitioner deposits a sum of Rs.10 crores with the respondents within three weeks from today which shall be kept in a separate account and submits a bank guarantee of the balance amount other than cash within the same period. It is clarified that the adjudication proceedings may go on but shall not be given effect without the leave of the Court.”

Read More: Petition Challenging GST Council’s Power to Change Classification of Commodity: Allahabad HC Stays CBIC Circular and Notices as Interim Relief

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