The GST Council on Saturday announced its decision to reduce taxes on molasses from 28 to 5 per cent. Union Finance Minister Nirmala Sitharaman said that the move would “benefit sugarcane farmers” and lower cattle feed cost as well. The council also decided to exempt alcohol for human consumption from the levy. 

Ms Sitharaman further announced that the GST on flour containing 70 per cent millets would have zero per cent tax from now on if sold loose and 5 per cent if sold pre-packaged and labelled. 

Speaking at the press conference following the 52^nd GST Council meeting, Ms Sitharaman said that the GST slash on molasses would enable fast clearance of dues of sugarcane farmers because “more money would be left in the hands of mills or whoever”. “The council and we all feel that it will also lead to a reduction in the cost of manufacturing of cattle feed, which will be a major development,” she added. 

Ms Sitharaman further said that despite the Allahabad High Court’s 2021 verdict that States had lost their legislation right to impose tax on ENA (Extra-Neutral Alcohol), the GST Council had “ceded that right” to the States. “If the States want to tax it, they are welcome to do it. If the States want to leave it, they are welcome to take a call on it. The GST Council is not taking a call to tax it, although the right to tax lies here,” the minister added. 

On being asked about Aam Aadmi Party (AAP) leader and Delhi Finance Minister Atishi raising the issue of tax evasion notices sent to online gaming firms, Ms Sitharaman spoke about the former’s concern about killing a “sunrise industry”. She said that Ms Atishi highlighted that the decision was going to “affect a young and youthful industry, which has so many prospects. So, that was the line taken by the Delhi minister,” Ms Sitharaman said, adding that the GST Council “heard her (Ms Atishi)”. 

Earlier in the day, Ms Atishi had vowed to seek withdrawal of tax evasion notices worth Rs 1.5-lakh crore sent to online gaming companies, saying that these would finish them off.