Question ID :
35834
GST
1. RM which we are purchasing is on GST 18% and our final product is tax free (our being feed supplement for animals). This has increased our purchase prise as earlier we were procuring RM against CST 2%. Can we claim input as refund as done with cloth manufacturers.
2. Or can we adjust GST input credit of RM mentioned in point no. 1 in our other GST liabilities arising out of sale of taxable products.
Posted by
harjinder
on
Oct 06, 2018
Filed Under
GST
Answer ID :
74968
Since the finished goods are exempted, you are not entitle for ITC nor you are eligible for Tax refund of inputs. Since ITC cannot be availed, same cannot be available for utilization in respect of GST paid on other dutiable goods.
Posted by
CA. BHANSALI ARVIND on
Oct 07, 2018
Answer ID :
74975
No, input tax credit is not available if output is tax free (as stated).
17(2) denies credit when output is wholly exempt. And as a result, GST paid becomes cost.
Posted by
CA. JATIN CHRISTOPHER A on
Oct 10, 2018