Levy of GST on ENA - GST - States - 12-13/2018-19-EXN-GST-23205-23223

Commissioner of State Tax and Excise Himachal Pradesh, Shimla Endst. No. 12-13/2018-19-EXN-GST-23205-23223 dated 1-8-2018 This is with reference to the issue raised on the captioned subject during the Video Conference held on 30-6-2018. This matter was discussed in the 20th meeting of GST Council on 5-8-2017 wherein it was decided to obtain legal opinion of Attorney General of India. Attorney General of India vide reference No. AGI 6/2017-Adv.C, dated 3-12-2018 has given following opinion on the issue : ENA typically contains 95% alcohol by volume and as such is not fit for human consumption. Under Article 246A(1) read with 366(12A), GST cannot be levied on the supply of alcoholic liquor for human consumption . ENA that is used for manufacture of alcoholic liquor is not supply for the purpose of human consumption as it is not consumed directly, but goes through a process of manufacture. For the reasons above, I am of the opinion that the judgment of the court in Bihar Distillery does not denude the Centre or the States of the power to levy GST on ENA that is used to manufacture alcoholic liquor for human consumption. In view of the above it is informed that GST will be applicable on the supply of ENA which is used for the manufacturing of alcoholic liquor for human consumption. Accordingly the suppliers of ENA are required to be registered under GST Act GST is to be levied on the supply of ENA. It is further informed that as per Entry No. 25 of Schedule-III of the Notification No. 1/2017-State Tax (Rate), dated 30-6-2017 and 1/2017-Central Tax (Rate), dated 28-6-2017 the supply of ENA is exigible to be taxed @ 18% GST.