GST Council exempts ENA levy, cuts rates on millet flour and more: HIGHLIGHTS

That's all from CNBC-TV18's coverage of the 52nd GST Council Meeting and Union Finance Minister Nirmala Sitharaman's press conference later. For more news and updates, log on to CNBC-TV18.com

GST Council Meeting: Vinod Giri, Director General, Confederation of Indian Alcoholic Beverage Companies (CIABC) on GST Council exempting ENA from GST 

"We are very happy to see the GST Council give a definitive recommendation on the taxability of Extra Neutral Alcohol (ENA) used in making alcoholic beverages. ENA is nothing but high strength potable alcohol used as the primary ingredient for making alcoholic beverages after due dilution with water. Ideally the industry would have liked all of alcohol including the finished product be under GST to bring parity in taxation across states. However, we know there are complexities involved in that but as long as alcoholic beverages are kept outside GST, putting ENA under GST and leaving the industry with a stranded cost would have made little sense, especially as companies do not have the freedom to pass on this tax in most states. So far, in absence of clarity from the GST Council, Courts have taken conflicting positions on the matter which has further compounded the uncertainties. Industry has been pleading with the Council and other Government agencies involved for several years to bring finality to the matter. GST Council has also taken it up several times in its meetings but a definitive recommendation and closure has eluded. Considering that, the GST Council’s decision is a big relief to the industry, it will bring stability and settle nerves all over. We had also recommended measures on related matters such as tax rate on molasses to bring a finality on the matter and are happy to see the Council recommend a comprehensive solution including reducing GST rate on molasses to 5% which should mitigate discomfort amongst the minority users buying molasses to make ENA. On behalf of CIABC, I thank the involved Governments and the Council for resolving a long standing demand of the alcoholic beverages industry. We feel relieved."

GST Council Meeting: Pratik Jain, Partner, PwC shares his take on GST on corporate guarantees

“I am a bit concerned on corporate guarantee. I mean, I am not sure how this 1% value has been arrived at. Because in some cases, actually, the large infrastructure companies would pay a much lesser percentage, arguably, to banks for similar guarantee. Let's say I could pay 0.25 or 0.5 and in the past, few companies might have actually done an independent assessment and paid on a lower value. So if it is clarified that 1% will be prospective, and it will not be taken as a benchmark for the past period it is still okay. But if 1% is then used by the authorities for the past periods as well, then it will lead to more litigation, I am afraid. But prospectively at least it gives a benchmark to the industry and to pay at 1%,” Jain told CNBC-TV18.

GST Council Meeting: MS Mani, Partner- GST, Deloitte India shares views on GST decision on ENA and molasses

“As far as the extra neutral alcohol (ENA) and the molasses related decisions are concerned, I think there are three decisions that have been taken. The first point over here is that the fact that the center has ceded the right to tax ENA in the context of the alcohol related businesses, which are in any case outside the purview of GST to the states, despite the Allahabad High Court decision, to me speaks very highly of the principle of cooperative federalism that we have been seeing in GST for quite some time. There have been a lot of discussions even in the past GST council meetings on various contentious issues. But over a period of time, we have really seen GST Council as becoming a very good forum for states and centre to sit and discuss their fiscal issues in the context of an indirect taxation. Now, this decision again reaffirms that cooperative federalism principle where the central has handed over the right to the states, which is the right thing to do, because in any case, taxation of alcoholic beverages is outside the purview of GST itself. And it is a state prerogative to tax alcoholic beverages. So in that light, if that decision to tax ENA is left entirely to states, it's excellent decision. As far as molasses is concerned and ENA for industrial use is concerned I think this is something which was awaited for a very long time and I am glad that they have taken a decision on that today,” Mani told CNBC-TV18.

GST Council Meeting: Pratik Jain, Partner, PwC shares views on GST on online gaming

“For online gaming we are not seeing the end of the matter. We will continue to see the litigation for the past period. What the government is saying is that we have not amended the law retrospectively. But in their view, in their reading, even earlier law, which was for betting, gambling and for things like game of skill, game of chance, all of that dispute they felt that it is a game of chance, and hence should be liable to 28% right from the beginning. Therefore, the notices have been issued. From first of October, that distinction between game of chance and game of skill goes away. The law clearly says that online real gaming, where money is involved will be subject to 28% tax on the full value. So there's absolutely no doubt from first of October, assuming of course all the states do pass the ordinance as it was mentioned. But for the prior period, I think industry would have a reasonable case to argue that it should not be 28% on the full value and particularly there were one or two court decisions in favour of industry as well. And obviously the case is pending before the Supreme Court. Now Supreme Court will finally take a take a view on the matter and obviously from an industry standpoint, it would have been good if the government would have said it is applicable from first of October 23. But obviously that's not the view coming from the government,” Jain told CNBC-TV18.

GST Council decides to cut tax on molasses to 5%: TS Singh Deo

The GST Council on Saturday decided to cut the Goods and Services Tax (GST) on molasses to 5%, from 18%, and exempt alcohol for human consumption from the levy. Chhattisgarh Deputy Chief Minister TS Singh Deo, who is a member of the GST Council, said extra-neutral alcohol (ENA) for industrial use will continue to attract GST.

Read full article here

No GST on flour that has 70% millets, says FM Sitharaman

The GST Council on Saturday exempted Goods and Services Tax (GST) on flour containing 70% of millet, said Union Finance Minister Nirmala Sitharaman on Saturday in a press briefing after the conclusion of the 52nd meeting of the body. The Council also reduced GST to 5% from 18% millets flour preparation on branded and pre-packaged and labelled products.

Read full article here

On Delhi Finance Minister Atishi raising the issue of tax notices to Online gaming companies at the 52nd GST meeting, Union Finance Minister Nirmala Sitharaman says,
 

"On the gaming, it was only the Delhi Minister. On the casinos, it was the Goa Minister. Delhi Minister's concerns were more on the lines of taxing them will kill a sunrise industry, our youth need this industry. And, also then taking up the issue of notices which have gone to these companies. We heard her. Delhi Minister also highlighted that this decision has been discussed over 2.5-3 years and if the decision taken in the council is going to affect a young and youthful industry, which has so much prospects. So that was the line taken by the Delhi Minister."

After the 52nd meeting of the GST Council, Revenue Secretary Sanjay Malhotra says,

"...There was some confusion on Zari. Earlier the council had recommended a 5% rate but there were some more Zari items in which plastic is also being used. The council has clarified that they will also attract 5% GST and not 18%...So it has been clarified that where the processing of barley into malt is being done, irrespective of whether will be supplied to the liquor manufacturing industry or otherwise, it will attract only 5%."

52nd GST Council Meet Live Updates: GST on molasses cut from 28% to 5%. The move will benefit sugarcane farmers, lower cattle feed cost, says Nirmala Sitharaman

52nd GST Council Meet Live Updates: Decision of levying GST on hostels has been deferred.

52nd GST Council Meet Live Updates: No GST on corporate guarantee given by director of a company.

In case of Corporate guarantee given by holding companies, GST of 18% of total amount guaranteed by parent company will be levied.

52nd GST Council Meet Live Updates: Services provided by Railways will now be subject to forward charge.

52nd GST Council Live Updates: Foreign-owned costal vessels doing coastal runs in India are exempted from IGST.

The existing IGST is 5%.

The GST Council has ceded the right to tax the extra neutral alcohol (ENA) to states.

The GST on ENA for industrial use to be 18%