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CA Final · Indirect Tax Laws · Charge of GST

Himalaya Distillers Pvt Ltd, a registered person in Dehradun, makes the following intra-State supplies in a month: (i) country liquor for human consumption to a licensed vendor, (ii) un-denatured extra neutral alcohol sold to a distillery for making alcoholic liquor for human consumption, and (iii) packaged mineral water to a retailer. Under the levy provision of the CGST Act, on which of these is central tax NOT leviable?

Central tax is not leviable on the liquor supply or on the un-denatured extra neutral alcohol meant for making alcoholic liquor for human consumption. Section 9(1) specifically excludes both. Mineral water is a normal taxable supply, so only the first two supplies fall outside CGST.

  1. AOnly (i)
  2. BOnly (i) and (ii)Correct
  3. COnly (ii) and (iii)
  4. D(i), (ii) and (iii)

Explanation

Section 9(1) levies CGST on all intra-State supplies except alcoholic liquor for human consumption and un-denatured extra neutral alcohol or rectified spirit used to manufacture alcoholic liquor for human consumption. Supplies (i) and (ii) are therefore outside CGST. Packaged water is an ordinary taxable supply, so (iii) is taxable. Option 'Only (i)' misses the ENA carve-out inserted from 1-11-2024.

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