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GST ITC Eligibiltiy

Auditor office (5 Points)

21 January 2025

My client is manufurer of South Indian Snacks (like Mixture, Dhall, etc). Can they claim ITC and pay GST 5% for whole supply?

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8382 Points)
Replied 21 January 2025

GST Rate for Snack Foods As per the GST Council's notifications, snack foods, including mixture and dhall, attract a GST rate of 5% (CGST 2.5% + SGST 2.5%).

ITC Eligibility To claim ITC, your client must ensure that: 1. _Inputs are used for business purposes_: The inputs (raw materials, packaging materials, etc.) must be used for manufacturing the snack foods.

2. _Inputs are taxable_: The inputs must be taxable under GST.

3. _Invoices and payment records are maintained_: Your client must maintain proper invoices and payment records for the inputs. Conditions for 5% GST Rate To pay GST at 5% for the entire supply,

your client must: 1. _Comply with GST regulations_: Ensure compliance with all GST regulations, including registration, invoicing, and payment.

2. _Maintain accurate records_: Maintain accurate records of production, sales, and inputs to support the 5% GST rate.

Additional Considerations 1. _Reverse Charge Mechanism (RCM)_: If your client purchases inputs from unregistered suppliers, they may need to pay GST under RCM.

2. _GST Returns and Payments_: Ensure timely filing of GST returns (GSTR-3B and GSTR-1) and payment of GST liabilities.

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