should i buy machinery after gst or before gst which will be benefit for me
Query (Issue) Started By: – manohar singh Dated:- 29-8-2016 Last Reply Date:- 4-7-2017 Goods and Services Tax – GST
Got 11 Replies
GST
i want to purchase machinery from other state, should i buy the machinery before gst is implement or after gst is implement.
Reply By Rajagopalan Ranganathan:
The Reply:
Sir,
The provisions of GST Act is yet to be finalised. Therefore non comments can be offered on your query.
Reply By KASTURI SETHI:
The Reply:
Sh.Manohar Singh Ji,
If you can wait for, better option is to purchase the machinery after implementation of GST, especially, in view of expected reduced rate of GST as compared to the present one. Most pro
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implemented in 2010. Then it was much talked about. But could not happen due to valid reasons. Now the development is good enough but the date of implementation is not sure.
Sir, today if you do interstate purchase, then against Form C you will be paying 2% CST , Excise duty @12.5% and entry tax (depend upon the State, say 4%). Total tax is 18.5%. Out of which cenvatable is 16.5% or 12.5% (without entry tax credit).
In GST the rate of 18% was suggested but now again it is debated to keep somewhere around 21% to 22%. If you purchase in GST, then IGST @ 21% or 22% would be liable to be paid. You will get full credit on intra state sale.
However, as suggested by Sri Sanjay Sir the call is supposed to be taken by the management. The market a
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akes a couple of years for the effect of GST to percolate and bring down the cost of the goods.
When the fact of the matter is that we have only almost made provisions in our Constitution for levying GST, the further path is a long way ahead.
A pragmatic business man does not and should not be swayed by this hype. After all, what you pay as taxes would certainly be allowed to be set off against your tax liability.
regards
abhishek p
Reply By Sahadev Maity:
The Reply:
Dear experts,
I am going to start a new factory, for the I need to buy some machineris from outer state of Rs around 30lacs. Previous CST was 2% but now GST is 18% on purchase of machinery.
So kindly advice me, can I avail the GST credit on purchase of that machinery i
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