GST Council grants states the ability to impose taxes on additional neutral alcoholic beverages

The GST Council decided to provide the states the authority to impose taxes on extra neutral alcohol (ENA), which is supplied for the production of alcoholic beverages, during its 52nd meeting on Saturday.

The Law Committee will review the best legal modification to exclude ENA from the scope of GST if it is used in the production of alcoholic beverages for human use.

a unique tariff The Customs Tariff Act established an 8-digit HS code at the level of rectified spirit for industrial usage. In order to include an entry for ENA for industrial usage generating 18% GST, the GST rate notice will be modified.

The council also strongly recommended against using millet flour in powder form that is marketed in loose form and contains at least 70% millet by weight, and in favor of using 5% millet flour that is sold in pre-packaged and labeled form.

Recommendations about adjustments to the commodities’ GST rates

The Council has announced that the GST rates for “Food preparation of millet flour in powder form, containing at least 70% millets by weight” falling under HS 1901 have been prescribed at 0% if sold in any other form outside pre-packaged and labeled form and 5% if sold in such form.

To make it clear that the entry for imitation zari thread or yarn attracting 5% GST rate covers imitation zari thread or yarn produced out of metallized polyester film/plastic film that falls under HS 5605.

On account of inversion, no refunds will be given for plastic or metallic polyester film, nevertheless.

Additionally, it was announced during the conference that foreign-going ships must pay 5% IGST on the ship’s valuation if they switch to a coastal run. Foreign flag foreign going vessel when it switches to coastal run subject to its reconversion to foreign going vessel in six months has been proposed conditional IGST exemption.

The committee also voted during the meeting to lower the GST on molasses from 28% to 5%. This action will improve mill liquidity and permit quicker payment of cane debts to sugarcane growers. As molasses is a component in its production, this will also result in a decrease in the cost of making cow feed.

Modifications to the services GST rates

Council additionally proposed that the exemptions to pure and composite services supplied to Central/State/UT governments and local bodies in respect to any function delegated to Panchayat/Municipality be retained with no changes.

Additionally, it has suggested exempting services provided to governmental authorities in the areas of water supply, public health, sanitation conservation, solid waste management, and slum redevelopment and upgradation.