Jump in cost of raw materials due to Covid lead to GST complications

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Many companies that reported an increase in their indirect tax outgo due to a steep jump in their import costs after the Covid pandemic fear that when things go back to normal, they could face intense scrutiny from the taxman. This is mainly because the Goods and Services Tax (GST) is pegged to the cost of the goods imported.

In most cases, the costs of the importers have gone up by anywhere around 10 percent to 20 percent. People in the know say that when the cost of goods imported jump by 10 percent so does the GST levied on that.

Many fear that when the situation goes back to normal indirect tax officials could still challenge the valuation of the goods imported as in most cases there are no verifiable benchmark for prices of most imports. In most cases the steep jump in the costs is due to the disruption in global supply chains, say industry trackers.

Source from: https://economictimes.indiatimes.com/news/economy/policy/jump-in-cost-of-raw-materials-due-to-covid-lead-to-gst-complications/articleshow/78924987.cms

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