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2023 (8) TMI 572 - APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGALReversal of ITC - sale of alcoholic liquor for human consumption effected by it at its premises - whether the appellant is required to undertake reversal in terms of Rule 42 to the extent of the turnover that relates to sale of alcoholic liquor for human consumption? - HELD THAT:- From the plain reading of the explanation to the Rule 42(1) of the GST Rules, 2017 as well as Entry 5 I and 54 of List II of seventh schedule, it is clear that for the purpose of computation of exempt turnover as well as total turnover, duties and taxes on alcoholic liquor for human consumption shall be excluded and not the whole value of sales of alcoholic liquor for human consumption. The appellant has claimed that under several legislations in India the term “goods” has been defined for charging of taxes on alcoholic liquor, and so the definition of ‘goods’ under section 2(52) of the GST Act, 2017, cannot include alcoholic liquor for human consumption. This claim of the appellant is not tenable. Defining “goods” in other Acts, does not bar defining the same in any other Acts including GST Act 2017. Clause 12A of Article 366 of the Constitution which was inserted vide Section 14 of the Constitution (101st Amendment) Act, 2016 also establishes alcoholic liquor for human consumption as goods even though that is in exclusion for the purpose of charging GST. It is established that alcoholic liquor for human consumption is “goods” even under virtue of the Constitution. Section 9 of the GST Act, 2017 provides for levy of GST on intra-state supplies of goods and/or services except on the supply of the alcoholic liquor for human consumption. This provision is in consonance of Clause 12A of Article 366 of the Constitution - Further, as per Section 49(4) of the GST Act, the amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or IGST Act. So, the objective behind ITC is for making payment towards output tax. Therefore, ITC cannot be allowed for the supplies which are non-taxable. Hence, as alcoholic liquor for human consumption is non-taxable, ITC cannot be allowed for supply of the same. Thus, the sale of alcoholic liquor for human consumption is a non-taxable supply under Section 2(78) of the GST Act, 2017 and subsequently is an exempt supply under Section 2(47) ibid. - the appellant is required to reverse input tax credit (ITC) in terms of sub-section (2) of section 17 ibid read with Rule 42 of the GST Rules, 2017 for sale of alcoholic liquor for human consumption. Appeal dismissed.
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