States cannot tax inconsumable alcohol

States cannot tax inconsumable alcohol

Topic: Polity

Context: The Apex Court on hearing the appeal filed by the Odisha government challenging the High Court judgement held that state legislature has no authority to levy duty or tax on alcohol not meant for human consumption.

Concept:

• The Constitution provides for a three-fold distribution of legislative subjects between the Union and the states, viz., List-I (the Union List), List-II (the State List) and List-III (the Concurrent List).
• The constitution makers have distributed the term ‘alcohol liqour’ into two heads – for human consumption and other than for human consumption.
• The former is put in Entry 51 List II authorizing the State Legislature to levy tax on them, whereas the latter is left to the Central Legislature under Entry 84List I for levy of duty of excise, the top court said.
• Therefore, the state govt was only empowered to levy excise duty on alcoholic liquor for human consumption and has no power to levy excise duty on wastage of liquor after distillation.

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