Gaurav Saraswat asked 6 years ago
GST on subsidy received by Government
Hi,
My company is into Greenhouse Manufacturing & Supplying. This is a subsidy based supply where a certain percentage (differ among states) is borne by the government & rest is by the farmer.
For example: In Himachal Pradesh, the subsidy is 80% and this is paid by the government directly to the manufacturing accounts (not through farmer as in Haryana/Rajasthan, etc).
Now as per section 15 [2] (e), the GST is not applicable to subsidies paid by the state or central government. But the explanation given underneath the section is confusing.
Request the learned members to kindly clarify the following:
- While billing, GST is to be applied on 100% of the bill or just 20% (farmer share) of the bill?
- How to do the billing?
- If it is to be applied on 100% of the bill, then can we claim a refund on the subsidy part?
Regards
Gaurav Saraswat
ConsultEase Administrator answered 4 years ago
The subsidy paid by CG or SG is exempt. Thus you need to pay tax only on 20%. You can raise a bill for Rs. 100, then mention subsidy from CG as Rs. 80. Mention taxable amount as Rs. 20. Charge tax on Rs. 20.
ConsultEase Administrator answered 4 years ago
The subsidy paid by CG or SG is exempt. Thus you need to pay tax only on 20%. You can raise a bill for Rs. 100, then mention subsidy from CG as Rs. 80. Mention taxable amount as Rs. 20. Charge tax on Rs. 20.
