5% ITC Rate but Output Rate is 18%

We are in a business where we have some input materials which are chargeable for 5% GST. Our output product is chargeable to 18% GST.

 

Because of this higher rate of Output GST there is a big burden on us for high prices whereas our profit is very limited.

 

Is there any relief available for us in GST laws?

Replies (3)
Quick Summary
This discussion addresses the financial strain caused by a significant GST rate difference, where input materials are taxed at 5% and the final product at 18%. While direct relief under GST laws isn't available, suggestions include raising concerns through industry unions to the GST Council. Practical advice focuses on managing working capital by shortening customer payment terms, as the output GST collected should eventually balance the input GST paid.

No, Sir...
....
Directly there is no relief in GST, however if you are facing true hardships, you can raise issue at GSTC level via your unions.

REGARDS

There shouldn't be a burden on you since you will be getting the GST amount on outward supply from the buyers. It can prove to be a burden in the initial months but when the working capital will start to roll then there shouldn't be a problem. Reduce the credit period of your customers payment.... that will be my suggestion

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