Page 26 - GSTL_7th May 2020_Vol 36_Part 1

J8 GST LAW TIMES [ Vol. 36
of same. Therefore, processes involved in manufacture of alcoholic liquor would
be liable to GST. Benefit of exemption under Entry No. 26(f) of Notification No.
11/2017-C.T. (Rate), dated 28-6-2017 is not available to alcoholic liquor for hu-
man consumption as it cannot be considered as food for purpose of exemption
under said notification.
However, once GST is paid on such charges, it becomes an eligible input
service to claim input tax credit, if otherwise eligible under Section 16 of CGST
Act, 2017.
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[Continued from page J6]

It shall certainly be point of debate whether expenses incurred for con-
taining the spread of a disease which has been classified as an epidemic should
be classified as staff welfare or not. Given the present situation prevalent across
the globe, it must be understood that these expenses are incurred out of compul-
sion instead of a routine activity. Though it can be considered to be for welfare of
employees but the very fact that such expenses are necessary for continued oper-
ations cannot be ignored.
Since in most of the States, Coronavirus has been classified as epidemics
under Epidemics Diseases Act, 1897, any action performed under these circum-
stances shall be treated as a statutory obligation instead of voluntary care and
welfare.
As per COVID-19 Regulations, 2020, COVID-19 means The Coronavirus
disease caused by Severe Acute Respiratory Syndrome Coronavirus 2 (SARS
CoV2) as defined by World Health Organisation. Various State Government un-
der the powers vested by COVID-19 Regulations, 2020, have issued guide-
lines/instructions to employers/companies/institutions to carry out sanitisation
in their premises. Under these circumstances, expenses made on such activities
shall be treated as an obligation instead of pure staff welfare.
Further, Clause 11 of the COVID-19 Regulations, 2020 provides that any
person/institution/organisation found violating any provisions of these regula-
tions shall be deemed to have committed an offence punishable under Section
188 of Indian Penal Code, 1860 (45 of 1860). Empowered officers may penalise
any person/institution/organisation found violating provisions of these regula-
tions or any further orders issued by Government under these regulations.
Since the expenses incurred towards containing the spread of disease ei-
ther for travel, quarantine, sanitising the premises, etc. is a statutory obligation
and is a punishable offence, the restriction imposed under Section 17(5)(g) cannot
be applied for admissibility of Input Tax Credit as it tends to bar only those per-
sonal consumptions which have been done without any obligation of law.
Hence under these circumstances, ITC should be permitted for expenses
incurred for containing COVID-19 and consequentially refunded in case of ex-
porters.
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