Sitharaman Asked Whether Liquor Can Come Under GST. Her Response

On the question of whether alcohol for human consumption and petroleum products will ever come under the Goods & Services Tax, Finance Minister Nirmala Sitharaman commented that it depends on the states.

"Liquor coming under GST is entirely dependent on the states... It is up to the states. I can't comment," she said at the NDTV Profit GST Conclave on Tuesday.

Alcohol presently falls out of the ambit of GST regime. It is the highest revenue generators for the state governments and therefore taxation on alcohol is not the Centre's decision. Liquor and petroleum products are levied with other taxes such as excise duty and value added tax or VAT.

Meanwhile, the new GST reforms have applied a special 40% levy on sin goods and super luxury goods; these include a variety of things such as cigarettes, chewing tobacco, gutka, and zarda along with exclusively non-alcoholic aerated beverages, caffeinated beverages, and fruit drinks.

On Sept 3, The GST Council approved the most comprehensive overhaul of India’s consumption tax system since its introduction in 2017; under which GST slabs were reduced to two — a standard rate of 18% and a merit rate of 5% along with a special 40% demerit rate for select goods.

Sitharaman said the reforms were in the making since the past one-and-half years, and the imposition of tariffs by the United States had nothing to do with it.