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GST rate on Molasses reduced in the 52nd GST Council Meeting

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Sandip More

35 Points Posted on 13 October 2023

The GST Council has decided to reduce the GST rate on molasses from 28% to 5% in the 52nd Council meeting on 07/10/2023, but still no circular and notification has issued.

I want to know the effective date from the rate of the molasses will be effective.

Is the reduction in rate is applicable from the publication of the press note or have to wait till the publication of the Circular or Notification.

Replies (2)

Quick Summary

The 52nd GST Council meeting has reduced the Goods and Services Tax (GST) rate on molasses from 28% to 5%, effective from October 21, 2023. This significant reduction is expected to lower raw material costs for industries like alcohol and cattle feed production. However, sugar mills may face an inverted duty structure, potentially allowing them to claim refunds for accumulated Input Tax Credit (ITC).

Suresh Kumar

Account

298 Points Posted on 13 October 2023

It will be defined in the relevant circulars/ notifications/ law amendments that from when it will be applicable. It may be retrospective. But, Generally applicable form the date of issuance of circular/ notification.

Have to wait

Aashok Kumar Sharma

Finance/Compliance Consultant

75671 Points Posted on 08 November 2026

Molasses rate cut (52nd Council):
• The 52nd GST Council (October 2023) reduced GST on molasses from 28% to 5% (Notf 08/2023-CT(R), effective 21 October 2023).
• This lowers the cost of raw materials for alcohol and cattle feed manufacturers.
• For sugar mills: output (molasses) at 5% now, which may create an inverted duty structure (inputs at higher rates). Refund of accumulated ITC (inputs) under Sec 54(3)(ii) is possible.