Despite a change in GST on a major component, there was no effect on liquor pricing

 Despite a change in GST on a major component, there was no effect on liquor pricing

In New Delhi: An industry executive claims that despite the GST Council's decision to exclude extra neutral alcohol (ENA), a crucial component used in the production of alcohol, from the GST net, there is unlikely to be any change in the pricing of alcoholic beverages.

According to a source with knowledge of the meeting's proceedings, the Council resolved to relieve the liquor business by keeping ENA out of the scope of the GST during its 52nd meeting on Saturday.

As a result of the federal indirect tax body's decision, ENA will no longer be subject to the 18% integrated GST (IGST), but rather a 2% central sales tax (CST) on interstate transactions.

The 2% CST is already included in the cost of alcoholic beverages, and manufacturers have been paying CST in accordance with the situation. 

This has long been a desire of the manufacturers, according to one industry official, who praised the action as a historic choice.

According to the first source stated above, the Council also reduced the GST rate on millet-based flour to 5% from 18%.

It is anticipated that lowering the tax rate on millet mix, of which millets make up 70%, would encourage consumer demand for it. The International Year of Millets is being commemorated in 2023.

After the meeting, TS Singhdeo, the deputy chief minister of Chattisgarh, informed reporters that the GST rate on molasses had been reduced from 18% to 5%. 

According to the first individual stated above, this choice will assist in releasing funds for sugar companies, enabling them to pay cane producers in advance.