Trading of Raw material & finished good
This query is : Resolved
11 August 2017
Dear Experts,
we are manufacturer of footwears. Can we sale raw material like rexin etc. as well can we purchase finished goods for sale as such after add our profit?
Moreover, we have add business type "Manufacturer" on GST. Should we add trading also when the Major Amendment option available in GST portal? Before amendment, can we do the above supply.
Please advise
Rakesh Sharma
11 August 2017
please experts,
Reply my query
12 August 2017
Experts are requested to please resolve my query.
13 August 2017
please experts advise me. I am in big confusion.
02 August 2025
Hi Rakesh,
Great questions about combining manufacturing and trading under GST! Let me clarify point-by-point:
---
### 1. **Can a manufacturer sell raw materials (like rexin)?**
* Yes, as a manufacturer, you **can sell raw materials** like rexin.
* This would be treated as a **trading activity**.
* You should maintain proper stock and accounts for raw material sales separately.
---
### 2. **Can you purchase finished goods and sell them after adding profit?**
* Yes, you can **purchase finished goods and sell them without further processing**.
* This is also considered a **trading activity**.
* You need to track this activity separately from manufacturing.
---
### 3. **On GST portal, if your major business is "Manufacturer," should you add "Trading" in your business type?**
* Ideally, yes. If you **engage in trading activity alongside manufacturing**, you should update your business activity on the GST portal to reflect **both**:
* **Manufacturer**
* **Trader/Dealer**
* This ensures correct classification and tax treatment for all your transactions.
---
### 4. **Before amending on GST portal, can you do the above supply?**
* Yes, you **can supply raw materials and finished goods** even if your registered business type is only "Manufacturer."
* However, it’s **better to update your business activity** to include "Trading" to avoid any compliance issues during audit or assessment.
* Also, GST invoices and returns will be more accurate if business types are correctly updated.
---
### **Summary**
| Question | Answer |
| ----------------------------------------- | ----------------------------------------------------- |
| Selling raw materials as manufacturer | Allowed, treated as trading |
| Buying & selling finished goods (trading) | Allowed, treated as trading |
| Updating GST business type | Recommended to add "Trading" alongside "Manufacturer" |
| Doing above before GST amendment | Allowed, but better to update soon |
---
If you want, I can guide you on how to amend your GST registration for adding trading activity or draft a notice to your tax consultant.
Would that help?
Great questions about combining manufacturing and trading under GST! Let me clarify point-by-point:
---
### 1. **Can a manufacturer sell raw materials (like rexin)?**
* Yes, as a manufacturer, you **can sell raw materials** like rexin.
* This would be treated as a **trading activity**.
* You should maintain proper stock and accounts for raw material sales separately.
---
### 2. **Can you purchase finished goods and sell them after adding profit?**
* Yes, you can **purchase finished goods and sell them without further processing**.
* This is also considered a **trading activity**.
* You need to track this activity separately from manufacturing.
---
### 3. **On GST portal, if your major business is "Manufacturer," should you add "Trading" in your business type?**
* Ideally, yes. If you **engage in trading activity alongside manufacturing**, you should update your business activity on the GST portal to reflect **both**:
* **Manufacturer**
* **Trader/Dealer**
* This ensures correct classification and tax treatment for all your transactions.
---
### 4. **Before amending on GST portal, can you do the above supply?**
* Yes, you **can supply raw materials and finished goods** even if your registered business type is only "Manufacturer."
* However, it’s **better to update your business activity** to include "Trading" to avoid any compliance issues during audit or assessment.
* Also, GST invoices and returns will be more accurate if business types are correctly updated.
---
### **Summary**
| Question | Answer |
| ----------------------------------------- | ----------------------------------------------------- |
| Selling raw materials as manufacturer | Allowed, treated as trading |
| Buying & selling finished goods (trading) | Allowed, treated as trading |
| Updating GST business type | Recommended to add "Trading" alongside "Manufacturer" |
| Doing above before GST amendment | Allowed, but better to update soon |
---
If you want, I can guide you on how to amend your GST registration for adding trading activity or draft a notice to your tax consultant.
Would that help?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- RCM on GTA Services
- Regarding Appointment of auditor in case of casual vacancy
- REVENUE RECOGNITION AS PER IND AS 115
- Audit of F and O T/O
- GST 9- Table 8
- How to update Transaction data in broker samco account holding after transfer shares KARVY
- For sale of shares of a private limited company, what is process cost and time for demat of shares
- Mismatch of Sales Invoice in GSTR-1
- Which SAC code should be ed?
- Inverted Tax Structure & Unutilized ITC on Services
- Conversion of Proprietorship Firm to Partnership Firm
- New change in GST rate
- Regarding Advance ITT and Advance ICITSS
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
- Revision under Section 264 in The Income Tax Act, 1961
Trending Online Classes
CAclubindia
