NEW DELHI: The GST Council on Saturday decided to not levy tax on millet flour when sold in loose, but it will attract 5% tax when sold in prepackaged and labelled form, Union finance minister Nirmala Sitharaman said.
Extra Neutral Alcohol (also known as raw alcohol), used for making liquor will be kept out of the GST ambit, the council said. GST’s law committee will examine suitable amendments in the law to exclude it from the GST ambit.
However, ENA for industrial use will attract 18% GST.
GST on molasses has been cut from 28% to 5%. It will increase liquidity with mills and enable faster clearance of cane dues to sugarcane farmers. “The liquor industry had a lot to cheer as the Council decided to not levy GST on ENA supplied to alcohol manufacturers. Also, it was clarified that job work for conversion of barley to malt would be liable to GST at 5% and not 18%.
The decision to reduce GST to 5% on molasses would help the sugar industry and sugarcane farmers. Similarly, reduction of GST on millet-based flour should bring relief for industry and health-conscious people,” said Pratik Jain, Partner, PWC.
In a bid to facilitate maritime trade and incentivise the use of coastal routes, the Council also recommended changes regarding foreign-going vessels. Previously, when a foreign-going vessel converted to coastal run, it was liable to pay 5% Integrated GST (IGST) on the value of the vessel.
However, the Council now announced conditional IGST exemption for foreign flag, foreign going vessels converting to coastal run, provided they are reconverted to foreign going vessels within six months. It also clarified that imitation zari thread will attract a 5% GST rate.
RAILWAYS ALLOWED INPUT TAX CREDIT
The Council also decided to tax all goods and services supplied by the Indian Railways under the Forward Charge Mechanism, allowing them to avail input tax credit under the GST framework.