Council to take first step on bringing alcohol into Goods and Services Tax

Council to take first step on bringing alcohol into Goods and Services Tax

The Goods and Services Tax (GST) Council will likely take the first step towards inclusion of alcohol in the GST during its meeting on Saturday. Despite resistance from states, extra-neutral alcohol (ENA), a key ingredient in making alcoholic beverages, or ‘alcohol for human consumption’, may be included in the GST if a consensus is arrived at

This is Centre’s second attempt at imposing the GST on ENA, which is taxed by states at present. Alcohol for human consumption, or potable alcohol, is out of the GST, whereas its input, ENA, is a grey area. Industrial alcohol is within the GST.

“The council will take a re-look at taxing ENA under the GST. States had opposed it earlier, but now we have a legal view on the matter, strengthening our case for taxing it under the GST,” said a government official.

The council is meeting after a gap of one-and-a-half months.The Centre has taken the views of the additional solicitor-general, who has pointed out that ENA is liable to the GST as it is not potable alcohol. The proposal is to tax it at the 18 per cent GST rate.

West Bengal Finance Minister Amit Mitra has argued if ENA is taxed under the GST, it will be seen as taxing alcohol. States currently levy a value-added tax (VAT) and sales tax on ENA.

“The council will also discuss if a constitutional amendment is needed to levy the GST on ENA or whether it can be done administratively,” said another official.ENA is a derivative of molasses and 80 per cent of it goes into manufacturing liquor. The rest is used by the pharmaceutical industry to manufacture cough syrups and the cosmetics industry to make perfumes.

The pharmaceutical industry, in particular, has been demanding inclusion of ENA in the GST so that it can avail input tax credit.The states have argued that if ENA is taxed under the GST, they will not be able to monitor the production of alcohol.However, the inclusion of ENA in the GST may trigger the inclusion of potable alcohol as well.

“Inclusion of ENA will mean there will be a violation of the GST fundamentals.It will lead to a cascading of taxes. Ideally, input and output should face the same tax,” said an industry expert.“One of the key objectives of the GST is to prevent breakage of the tax credit chain. This has not been achieved in the case of some inputs such as ENA. It is essential to evolve a system whereby input tax credit does not become a cost to any industry,” said MS Mani, partner, Deloitte India.

"If ENA is the sed as an input for production of alcohol and not fit for direct human consumption, then it should have been liable to GST right from beginning, as constitutional restriction with respect to levy of GST is only on alcoholic liquor for human consumption," said Pratik Jain, partner, PwC India.The VAT paid on the purchase of ENA can be used as a set-off on the VAT payable on sale of potable alcohol.

However, if ENA is subject to the GST, input tax credit will no longer be available.

Sobering Reality

GST Council to consider levying the tax on extra-neutral alcoholA derivative of sugarcane molasses, 80 per cent of high-purity ethyl alcohol or Surfin is used to manufacture 'alcohol for human consumption'; rest used in pharmaceutical, perfumery and cosmetic applicationsPotable alcohol is constitutionally outside the purview of GSTStates want to continue levying the value-added tax on ENACentre says it is not consumed by humans. Hence, GST must be levied

The Business Standard, New Delhi, 08th March 2018

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30% The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25) Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6

Jaitley plans to cut MSME tax rate to 25%

Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem

Don't forget to verify your income tax return in August: Here's the process

An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s

CA Online

Search This Blog