Gst clarrification

175 views 3 replies

D.Rajendran

Accounts Manager

55 Points Joined March 2010

Company A is in the Business of recycling the last stage un recyclable plastic ( environmental solution)

Company A is not an NGO/ Trust. Its " for profit making" company.

Its putting up a Project - Plant and Machinery

Company B pays 20l to Company A under its CSR - as Viability Gap Funding to bridge the gap in Capital expenses ( as good as a donation from Company B to Company A)

No services rendered by Company A to Company B. Only obligation for Company A is to Complete and run the Project for a period of 15 years.

Question? Whether this VGF paid by Company B to Company A is liable to GST. If so what is the rate of tax ?

Replies (3)

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

As per my view , I do not find CSR (Co.social responsibility) services exmpted under any notification in GST

So it's Taxable in GST (as per section 7cgst act)

now the question is at what rate .... As when sum was paid to the company A. the services or what job is to be done is not known , in that case under GST standard 18% percent to be charged

Moreover , other experts opinion is needed

D.Rajendran

Accounts Manager

55 Points Joined March 2010

Dear Sir

No service done by A to B and B only funding to A similar like a donation... then its applicable GST or not?

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

If donation or grants in which the grantor does not receive any benefits in return , & it is not a consideration for any supply , so it is out of GST. No GST is applicable....

but as per income tax , it will be treated as advance at Ur side, & unsecured loan on recepient side , I don't think that u can book as donation .

plz other experts opinion is also needed