TREATMENT OF CENTRAL GOVERNMENT SUBSIDY TO FERTILISER MANUFACTURERS

[Pramod Panda]

A MANUFACTURER OF SSP FERTILIZER IS RECEIVING SUBSIDY FROM CENTRAL GOVERNMENT WHICH DOES NOT CONSTITUTE PART OF VALUE OF SUPPLY IN ACCORDANCE WITH SEC-15(2)(e) OF THE CGST ACT.

QUERY;

1. WHETHER SUCH SUBSIDY IS A NON GST SUPPLY OR EXEMPTED SUPPLY OR NO SUPPLY?

2. WHERE TO SUCH SUCH ITEMS IN GSTR-9 AND GSTR-9C ?

[KASTURI SETHI]

1. It is exempted supply.

2. Show it in Table N0.5(D) of GSTR-9

3. Show in in Table No.7 (B) of GSTR-9C.

[Pramod Panda]

DEAR KASTURIJI,

IN MY VIEW, SINCE THE SUBSIDY RECEIVED FROM CENTRAL GOVERNMENT IS NOT TO BE CONSIDERED AS PART OF THE VALUATION AS PER SEC-15(2)(e) FOR THE PURPOSE LEVY OF GST, IT SHOULD BE CONSIDERED AS NO-SUPPLY.

[KASTURI SETHI]

It cannot be termed as "No supply". It can be called as non-taxable supply. "No supply" has been defined/detailed in Schedule-III under Section 7 of CGST Act, 2017.

AI Summary

Non-taxable supply classification for central fertiliser subsidies debated; guidance given on GSTR 9 and GSTR 9C reporting.
Central subsidy to an SSP fertiliser manufacturer is excluded from taxable value under Section 15(2)(e). One commenter concludes it is an exempt supply and should be reported in GSTR 9 Table 5(D) and in GSTR 9C Table 7(B). Another views the subsidy as "no supply," but the discussion rejects that label under Schedule III/Section 7 and treats the subsidy as a non taxable supply requiring appropriate reporting.