18% GST Payable on Manufacturing of Alcohol For Human Consumption By Way Of Job Work: Andhra Pradesh High Court

The Andhra Pradesh HC, passed a Judgement on 20th October 2022 it was held that 18% GST is payable on the maker of alcohol for human consumption by way of job work has observed that alcoholic liquor is not considered a food. Services by way of job work in relation to the manufacture of alcoholic liquor for human consumption are not eligible for 5% GST, this was seen in the case of Writ Petition No. 15534 of 2022 the case was presided over by the division bench of Justice C. Praveen Kumar and Justice A.V. Ravindra Babu


The petitioner/assessee is a maker of Indian-made foreign liquor having its distillery at Karakambadi Village, Chittoor District, & is a franchisee of M/s. United Spirits Ltd, Bangalore, for the maker of “McDowell” brand alcoholic beverages like rum, whisky, & brandy. It purchases extra-neutral alcohol from several distilleries, food flavours, special spirits, & caramel from registered dealers situated within the state of Andhra Pradesh as well as from dealers located outside the state of Andhra Pradesh.

An assessment was made by the respondent for the tax periods of 2017-2018, 2018-2019, & 2019-2020 in levying CGST amounting to Rs. 24,94,104 with penalty & interest under CGST & IGST The petitioner confronted the GST & penalty levy on the grounds that the job work charges connected with the maker of alcoholic liquor at 18% rather 5% are illegal & unconstitutional.

The petitioner pacified that since liquor also falls within the category of “food & food products” under CH- 22 as it was sought to be inserted at S.No. 26 following the Clause e’, the rate of tax payable is only 5%. AS per Notification No. 6/2021, dated 30th September, 2021, & taking effect on 1st October, 2021, job work services can only be taxed at 5%, not 18%, because no notification is published in the Gazette until 30th September, 2021.

The department pacified that on 30th September, 2021, Notification No. 6/2021 was provided, making additional amendments to Notification No. 11/2017, by which the initial 5% tax imposed was increased to 18% in respect of services by way of job work in related to the making of alcoholic liquor for human consumption.


The court relied on the decision of the SC in the case of Collector of Central Excise vs. Parle Exports Pvt. Ltd., in which it was held that it will never be the motive of the legislature to exempt costly items like alcoholic liquor under the category of food & food products, although though the same is for human consumption. The court dismissed the writ petition.

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