Input and output tax

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This query is : Resolved

Mukul Sharma (Querist)

26 December 2017 Currently we are providing C&FA (Clearing and Forwarding Agent) services to our clients. Now my query is, if we are paying security charge bill (with GST @ 28%) on behalf of the Company and in our books we take input tax credit of (tax paid on same bill (GST@28%). And we are covered under 18% tax bracket.
After that we charged the same amount from company by raising a tax invoice (GST@18%).
Is all this accounting process is true.

Rakesh Mishra

Rakesh Mishra (Expert)

26 December 2017 Yes you are liable to charge GST as per your tax bracket

Mukul Sharma

Mukul Sharma (Querist)

26 December 2017 But sir, is it fair that we are taking input of GST (@28%) and charging from client @18%.
so in that case Govt will only get only GST which is @18%

Mukul Sharma

Mukul Sharma (Querist)

26 December 2017 Please suggest sir asap........

Rakesh Mishra

Rakesh Mishra (Expert)

26 December 2017 Yes, because the taxes are on output of material or service so what so ever input you are getting that has been charged according to its classification. Further, inputs available to you may be ranging from 0% to 28 % but you have to pay only @18% as prescribed. There is a value addition formula, in your case you have paid through your security service agent 28%.

Mukul Sharma

Mukul Sharma (Querist)

26 December 2017 Thank you Sir for suggestion

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