: Importers of denatured ethyl alcohol, chemical used in manufacturing sanitizers, approach court over GST classification issue #FinanceIndia #StockMarketNEWS Importers of denatured ethyl alcohol, chemical

@StockMarketNEWS Tue 25 Jan, 2022

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Importers of denatured ethyl alcohol, chemical used in manufacturing sanitizers, approach court over GST classification issue #FinanceIndia #StockMarketNEWS
Importers of denatured ethyl alcohol, chemical used in manufacturing sanitizers, approach court over GST classification issue New Delhi, Jan 20 (KNN) Importers of denatured ethyl alcohol have approached the Bombay High Court after the customs department initiated investigations into the classification of imported products.

Ethyl alcohol and other spirits denatured are the worlds 1360th most traded product.

In 2019, the top importers of Ethyl alcohol and other spirits denatured were Canada (USD 503M), India (USD 140M), South Korea (USD 120M), Germany (USD 109M), and Colombia (USD 107M), according to the Observatory of Economic Complexity Visualization Tool.

India’s import of denatured ethyl alcohol was USD 140 million in the year 2019, a 15. 2% growth as compared with USD 122 million in the year 2018.

Import duty is imposed by the government when Denatured Ethyl Alcohol is imported into India from any country. Until recently, importers were only paying 2. 5% duty on all their imports. Now, they have been asked to cough up an additional 2. 5% duty.

However, according to some media reports quoting tax experts, under the new GST framework, this part of excisable goods was put into the new regulations and that is causing confusion.

Hearing the writ petition filed by one of the companies, Satyam Petrochemicals, the court asked the customs department to give at least a week’s notice before taking any "coercive steps".

The importers had claimed that the customs department had conducted seizures that could have impacted their supply and created a shortage of the raw material.

The consumer demand for covid related commodities has risen since the year 2020 hence the customs department’s stand could impact the supply of some of the crucial materials such as raw material used in hand sanitizers, disinfectants, and Remdesivir needed during the Covid pandemic.

Importers of denatured ethyl alcohol have been paying a lower or concessional rate of customs duty over the years as this was categorized as ‘excisable goods’.

The customs department said that since excise is not part of GST, the importers must pay additional taxes as per the existing regulations.

Some of the companies had in March last year approached the Gujarat High Court and Bombay High Court in this regard.

The Gujarat High Court had asked the indirect tax department to submit its explanation after several companies importing a key raw material used to make sanitizers and disinfectants dragged the government to court following their inability to avail benefits under the Goods and Services Tax (GST) framework.