CIRCULAR NO. 54/28/2018-GST: GST ON FERTILIZERS SUPPLIED FOR MANUFACTURE

Fertilizers supplied for manufacture will be taxed at 5% GST.

The input tax credit (ITC) on such fertilizers can be claimed by the manufacturer.

The manufacturer must use the fertilizers for the production of taxable goods.

If the fertilizers are used for non-taxable goods, the ITC claimed will be reversed.

If the fertilizers are used for exempt goods, the ITC claimed will be reversed.

If the fertilizers are used for both taxable and non-taxable/exempt goods, the ITC claimed will be apportioned accordingly.

The manufacturer must maintain proper records of the use of fertilizers for production.