GST Council Slashes Tax On Molasses To 5%, Exempts Alcohol For Consumption

The Goods On Service Tax (GST) Council has announced a decrease in the tax rate for millets. Millets will now be taxed at 5 per cent under the GST, instead of the previous 28 per cent category. Additionally, alcohol for human consumption will be exempt from the tax.

Talking about the tax slab for millets, Union Finance Minister Nirmala Sitharaman said, "GST has been reduced from 28 per cent to 5 per cent. This will benefit sugarcane farmers we hope, and this will enable their dues to be cleared faster because more money will be left in the hands of the mills or whoever. The council and we all feel that it'll also lead to a reduction in the cost of manufacturing of cattle feed, which will be a major development." Molasses is a by-product of sugarcane and is used as a raw material for alcohol production.

The minister stated that a new tariff HS code has been created to cover industrial use of rectified spirit. Rectified spirit used in industries will now have its own HS code. The GST rate notification will be changed to include ENA for industrial use, which will be taxed at a rate of 18 per cent.

Sitharaman discussed changes made to the creation of the GST Appellate Tribunal body. The council decided that the president's age limit would be raised to 70 years and the members' limit to 67 years. Previously, the president's age limit was 67 years and the members' was 65 years.

The finance minister confirmed that millet food preparations will be taxed at a reduced rate of 5 per cent. She stated that the GST Council wanted to support millets, and this can be seen in the promotion of millets through the GST. Millet food preparations in powder form with at least 70 per cent millets by weight fall under the HS 1901 category. If millets are blended with other flour and the millets composition is 70 per cent, there will be a 0 per cent GST if they are sold loose and a 5 per cent GST if sold pre-packaged and labelled.

Chhattisgarh Deputy Chief Minister T S Singh Deo discussed the issue of online gaming companies facing GST evasion notices with reporters. He mentioned that states like Delhi and Goa raised concerns about these companies being charged retrospective taxes. He explained that the tax component is much higher than the net revenue, amounting to around Rs 16,000 crore or Rs 18,000 crore. However, the Union finance minister clarified that the government cannot influence the decision-making process of independent bodies but can offer clarifications if needed.