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Gst on custom milling

20 May 2018

Gst on custom milling is applicable @ 5% on processing charge as per notification but millers do not raise any invoice and they receive the same by govt stating Gst so are they liable to pay Gst on the same.

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2 Replies

Vinod Babu (24191 Points)
Replied 21 May 2018

If you are making outwards supplies then you must raise sales bills with gst.

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PARAS CHHAJED (CA Practice ) (1025 Points)
Replied 14 October 2018

In Chhattisgarh state the Goverment is procuring Paddy at support price from farmers through various Co-opertive Societies. The Paddy so procured is then issued to Rice Mills for custom milling of paddy and Rice is delivered to Government through State Civil Supplies Corporation for sale through Fair Price Public Distribution System.

For Custom Milling the the service charges as fixed by the Central Government is paid on which GST is also paid by the Government.

When a rice miller mills additional quantity he is paid Protsahan Rashi (Additional Encouragement Amount) based on quantity milled but the Government is not paying GST on this.

Please guide as to whether this Protsahan Rashi is not liable to GST ? If so kindly share relevant provision / notification. Thanks