Skip to content

CA Final · Indirect Tax Laws · Charge of GST

Sundaram Distillers, Chennai, supplies the following within Tamil Nadu in a month: (i) country liquor for human consumption, (ii) rectified spirit sold to a bottling unit for manufacturing alcoholic liquor for human consumption, (iii) industrial alcohol used to make paints. Applying section 9(1) of the CGST Act, for which supplies is CGST leviable?

CGST is leviable only on the industrial alcohol supply. Section 9(1) excludes alcoholic liquor for human consumption and un-denatured extra neutral alcohol or rectified spirit used to manufacture such liquor. Industrial alcohol for making paints is not covered by this exclusion, so it remains taxable.

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

Explanation

Section 9(1) levies CGST on all intra-State supplies except alcoholic liquor for human consumption and, since 1-11-2024, un-denatured extra neutral alcohol or rectified spirit used to manufacture alcoholic liquor for human consumption. Supplies (i) and (ii) are therefore outside CGST. Industrial alcohol for paints is not excluded, so only (iii) is taxed. Option (c) wrongly treats rectified spirit for liquor manufacture as taxable.

Did you get it right without looking?

One question tells you little. A timed set on Charge of GST shows your real accuracy, how long you take and where you lose marks.

Practise Charge of GSTFree diagnostic mock

More Charge of GST questions