Budget 2024 GST change: Will Liquor price in India turn cheaper?

New Delhi: During the presentation of Budget 2024-25, Finance Minister Nirmala Sitharaman introduced significant changes to Income Tax rules. She raised the standard deduction limit to Rs 75,000 from Rs 50,000 under the new tax regime. Income tax slabs were also adjusted. These changes may not meet the expectations of the middle class, but the government has plans to ease their concerns. Notably, there’s a budget amendment that could potentially lower liquor prices nationwide.

Alcohol to become cheaper?

Apart from direct taxes like Income Tax, Sitharaman discussed indirect taxes such as customs duty and GST during her speech. One notable change involves Extra Neutral Alcohol (ENA), a crucial ingredient in alcoholic beverages. The government has removed ENA from the scope of Central GST by amending Section 9. Additionally, adjustments are planned for Integrated GST (IGST) and Union Territory GST (UTGST) for ENA.

This move is expected to reduce the cost of ENA in domestic trade and imports. However, its impact on liquor prices will depend on decisions made by state governments in the upcoming GST Council meeting. According to GST laws, if the government reduces GST on an item like ENA, the benefits must be passed on to consumers.

By eliminating the tax on ENA, the manufacturing costs for liquor companies could decrease, potentially leading to lower retail prices. However, state governments also levy taxes on liquor, so they could choose to offset this reduction with additional taxes or maintain current prices.

Union Budget includes changes aimed at modifying income tax rules and potentially reducing liquor prices through adjustments in GST on ENA, pending decisions by state governments.

No change in Old Tax Regime?

Finance Minister Nirmala Sitharaman mentioned at the post-Budget press conference that there are currently no plans to remove the old tax system, which allows deductions for investments in government schemes and buying or building a home.

 Will Liquor price in India turn cheaper? Finance Minister Nirmala in her Budget 2024 speech announce removal of ENA from the scope of Central GST by amending Section 9.  Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today