Rate of tax on Extra Neutral Alcohol

[Subbarao PV]

Due to the amendment made to Section 9 of the GST Act, 2017 effective from 1.11.2024, 'un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor, for human consumption” is kept out of the purview of the GST.

Is there any clarification on the exigibility to tax (whether VAT or GST and at what rate) during the period from 1.7.2017 to 31.10.2024

AI Summary

GST Amendment: Extra Neutral Alcohol for Liquor Production Excluded from GST from Nov 2024; Previously Taxed at 18% A forum discussion addresses the tax implications on Extra Neutral Alcohol (ENA) due to changes in the GST Act, 2017. An amendment effective from November 1, 2024, excludes 'un-denatured extra neutral alcohol used for alcoholic liquor production' from GST. Queries were raised about taxation from July 1, 2017, to October 31, 2024. Replies indicate that ENA is taxable at 18% under a residual entry. Legal opinions clarify that GST applies to ENA used in manufacturing alcoholic liquor, as it is not directly consumed. Suppliers must register under the GST Act, with an 18% tax rate applicable.