Refund in tax difference

This query is : Resolved

Puneet Goyal (Querist)
Follow

06 July 2017 Need to know..A manufacture is buying a raw material of steel at 18% and finished product comes under tax slab of 5%. Will the manufacture get the refund in GST ??

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

06 July 2017 No refund....
By the way, which is this manufacturing activity where the composition of raw material having 18% gst is more than 36% of its selling price??????????

Puneet Goyal

Puneet Goyal (Querist)
Follow

06 July 2017 Amol ji

We sell an item name ROTARY BARREL PUMP which is operated by hand and is used to dispense oil from barrel drums. It is made of cast iron. Two biggest exporters of India of this item have put the same item under diff tax slab ...one in 5% which says hand pump under code 84131110 and other in 28% which says positive rotary displacement pump under code 84136000.

We are a medium scale industry - non excisable unit with business in domestic market. Now we are under this confusion in what slab we put in and how we can clarify the code and tax rate.

If we take under 5% we won't get any refund we will be under huge loss and if 28% rates will drastically increase the prices. Our product will loose domestic market.

Please give us ur advise sir.

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

06 July 2017 I think....HAND pump is the key to find out code.....
and HAND pump is at 5%

Puneet Goyal

Puneet Goyal (Querist)
Follow

06 July 2017 But sir, all raw material associated with this item is under 18% and we will get input credit of 5%. What about our 13% ???

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

07 July 2017 can you please give the value......say like this
raw material re required for one hand pump.........this you are saying that you will pay GST at 18% right?
labour required for one hand pump........ no GST...right?
other expenses required for one hand pump....... no GST right?
Total cost of hand pump
add Profit
Selling price of hand pump.........this you will collect GST at 5%
Try to put the figures and then you should redraft your query....

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now