“GST Council Delegates Taxation of Extra Neutral Alcohol to States and Reduces Rates on Millet Flour”

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In a significant development, the Goods and Services Tax (GST) Council, presided over by Union Finance Minister Nirmala Sitharaman, convened in New Delhi to make several crucial decisions that will have far-reaching implications on taxation and various industries.

Delegation of ENA Taxation to States

One of the key decisions taken by the GST Council is the delegation of taxation authority for Extra Neutral Alcohol (ENA) to the states. ENA is a critical component used in the production of potable alcohol. While the GST Council has the power to levy charges on ENA, it has opted to transfer the taxation rights for distilled alcohol intended for human consumption to the respective states. However, it’s important to note that ENA used for industrial purposes will continue to attract GST.

Reduced GST Rates on Millet Flour

The GST Council also announced a revision in tax rates for millet flour. Union Finance Minister Nirmala Sitharaman explained that if millet flour is unpackaged and contains at least 70 percent millet, it will be subject to a zero percent tax rate. However, if the millet flour is packaged and labeled, it will incur a five percent tax rate.

Lowered GST Tax on Molasses

Another significant change introduced during the 52nd meeting of the GST Council is the reduction in GST tax rates on molasses. The rate has been lowered from 28 percent to 5 percent. This move is expected to benefit sugarcane farmers and lower the cost of cattle feed.

Amendments to GST Appellate Tribunal

Furthermore, the meeting saw amendments to the tenure rules for the president and members of the GST Appellate Tribunal. Under the revised rules, both the president and members of the tribunal can serve up to a maximum age of 70 years. This marks an increase from the previous age limit of 67 years for the president and 65 years for members.

The 52nd meeting of the GST Council brought together various stakeholders, including the Union Finance Minister, the Union Minister of State for Finance, chief ministers from Goa and Meghalaya, and finance ministers from states and union territories with legislatures. These decisions are expected to streamline taxation, boost specific sectors, and contribute to the ease of doing business in India.

Sources By Agencies