Distilled alcohol for making spirits may get tax exemption

The Goods and Services Tax (GST) Council will discourse on exempting distilled alcohol used to make spirits from the indirect tax at its meeting on 7th October.

According to the source, the council, which is presided over by the Union Finance Minister and includes state Finance Ministers, would also explore a proposal to reduce the GST on molasses from 28 percent to 5 percent, according to a source.

India does not impose GST on liquor, however extra neutral alcohol, the essential ingredient required to manufacture alcoholic beverages, is taxed differently by states.

It is also proposed that extra neutral alcohol made from grains and molasses that is used to make liquor will be excluded from GST for an ‘interim’ period.