GST on alcohol: Council may set 18% tax on alcohol used as industrial input

According to a source speaking anonymously to CNBC TV18, there are considerations within the GST Council to clarify the taxation of extra neutral alcohol (ENA) used for industrial purposes distinct from its use in human consumption. \r

The council is likely to propose levying an 18% GST on ENA used industrially, establishing it as an industrial input. This move aims to streamline tax compliance by introducing a new tariff and code for ENA, simplifying future returns and assessments. In October 2023, the 52nd GST Council meeting exempted ENA used for manufacturing alcoholic beverages from GST and reduced GST on Molasses from 28% to 5%.