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Are you under the 5% GST bracket or exempt bracket?

The practice of reading about notifications and rules, and applying the same to businesses has increased tremendously among GST officials.

This is especially true for businesses where the applicable GST is 5% or the ones that come under the GST exempt category.

The case of Sindur and Homeopathic Medicine. It is common for most businesses to claim exemption from GST on the sale of Sindur, whereas the department demands tax at the rate of 18% on invoices issued by E-commerce.

Another case with Homeopathic medicines in which officers demand 12% GST compared to 5%, because of the non-fulfillment of all the conditions specified in the rate notification.

What can we learn from this?

1. Keep necessary evidence handy with a proper explanation justifying the rate of GST along with corresponding HSN / SAC.

2. Have advance rulings in hand (favourable or unfavourable) to deal with situations like investigations, audits, assessments, etc. 

3. Compare the rates you charge with your competitors to re-confirm the tax rates along with corresponding HSN.

4. Also, take due care about the HSN / SAC classification in case the same HSN / SAC attracts different rates.