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GST refund on school uniform

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shivam jain

student a final

7 Points Posted on 02 June 2021

if I m a school uniform manufacturer.
I pay gst as input tax @ 12 % on purchase of yarn.
and I collect gst as output tax @ 5% on sale of school uniforms .
then how this difference of 7% can be claimed as refund .?
please explain .
thanks in advance .

Replies (2)

Quick Summary

This discussion explains how school uniform manufacturers can claim a GST refund. By paying 12% GST on yarn (input tax) and charging 5% GST on uniforms (output tax), manufacturers create an inverted duty structure. This difference allows them to claim a refund for the excess input tax credit paid.