Screws on liquor manufacturers, the likelihood of a large amount of GST recovery

The action of the State Revenue Intelligence Directorate (SDRI). The investigation started against liquor manufacturers in VKI and Bahrod of Jaipur. The State Revenue Intelligence Directorate (SDRI) recently initiated Investigation action against the state’s leading liquor manufacturers located in VKI, Jaipur, and Behrore, Jaipur.

There’s an enormous possibility of giant GST recovery. (Jaipur News) SDRI had received information that the state’s liquor manufacturers were also being charged tax at the speed of 5.5 percent under VAT on raw-material utilized in the manufacture of liquor. Whereas, as a final product, only manufactured liquor is subject to VAT. The chief of wine manufacturing is Ra-material ENA. ENA features a precision of about 95 percent, which can’t be directly used as alcohol.

GST law came into force from Dominion Day, 2017 within the state
it’s noteworthy that GST law has been implemented within the state from 01 July 2017. Under Section 9 (1) of the GST Act, human consumption liquor is excluded from the purview of GST. Aside from this, petrol, diesel, aviation turbines, etc. Also are excluded from the purview of GST. SDRI found in its investigation that ENA is employed on behalf of alcohol, pharma companies, and cosmetics companies. VAT was found to be charged at 5.5 percent of VAT on all this sale and sale, whereas only liquor is excluded from the purview of GST as a final product after GST is implemented within the state.

GST recovery

18 percent GST liability
ENA isn’t excluded from the purview of GST and ENA on which GST is liable at the speed of 18 percent under serial number 25 of schedule three of HSN code 2207. Despite the specific provision, these liquor manufacturers have levied VAT at the speed of 5.5 percent rather than 18 percent GST on alcohol sales and industrial sales, while GST is taxed at 18 percent. This could are done, giving the government less revenue at a speed of 12.5 percent.

Preparation to gather differential tax on the quantity of 500 crores consistent with preliminary information, SDRI is preparing to send a recommendation to the Commercial Tax Department for collection of differential tax on the quantity of about 500 crores. Aside from this, documents also are being collected by SDRI from other liquor manufacturers within the state. After which the taxation action is going to be taken after examination of the document.