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News: A Constitution Bench of 9 judges has upheld that states have power to tax not just alcoholic beverages, but also ‘industrial’ alcohol.
1. The dispute between the Centre and the State over taxation power arose due to overlapping entries in the seventh schedule of the constitution.
2. Seventh schedule of the constitution deals with the division of legislative powers between the centre and the state. It includes 3 Lists: A) Union List B) State List C) Concurrent List.
3. The Centre had claimed exclusive control over industrial alcohol under Entry 52 of the Union List. While the Supreme Court held that the phrase ‘intoxicating liquor’ in Entry 8 of the State List would include industrial alcohol within its ambit.
4. This decision is expected to boost state’s revenue as the excise duty levied on alcohol consumption is a key component of revenue generated by most states.
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