Go AD-Free with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

GST applicable in state Govt. Subsidy

Abhinav Sharma (12 Points)

29 September 2019

please suggest me invoice format

if total amt. for billing is 50k and state Govt. is providing 20k as subsidy

so customer gives 30k and gst on material is 5%.

Reply
Follow
Share

4 Replies

RAJA P M ("Do the Right Thing...!!!") (128106 Points)
Replied 29 September 2019

Are You received subsidy from govt to Your account directly...?!

Upgrade to CAclubindia Pro. Subscribe Now!

Swati (Chartered Accountant) (157 Points)
Replied 29 September 2019

As per Section 15(2)(e) of CGST Act 2017, the value of supply shall include subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments.
Here in this case, the subsidy is not to be included in the transaction value even if related to the price, as the subsidy of Rs. 20000 is by State Government.
So GST would be charged on Rs. 30000.

RAJA P M ("Do the Right Thing...!!!") (128106 Points)
Replied 29 September 2019

As per query.,

Subsidy not claiming by Seller. It's to buyer of the product. So, seller can be charge GST on his supply value...

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 29 September 2019

Government do supply to end customer directly , means supply thrrough some mediatator or supplier . (Ie Gas Agencies)
Hence As per Section 15 of CGST act the GST is applicable on transaction Value ie 30k

Can issue bill in following manner: .

Material . 50K
Less : Subsidy. 20K

Net Value. 30k
GST . @ 5%. 1.5k

Total. 31.5K