Under GST there is no separate tax on \u201cmanufacturing\u201d as there was under the old excise regime \u2014 a manufacturer is simply a supplier of goods who pays GST on the outward supply at the rate applicable to those goods, and claims input tax credit on inputs, input services and capital goods. This guide explains how GST works for manufacturers. (Rates depend on the goods’ HSN and can change \u2014 confirm the current rate.)<\/p>\n
A manufacturer registers under GST once turnover crosses the threshold (or immediately for interstate supply). GST is charged on the sale (outward supply) of the finished goods<\/strong> at the rate for their HSN classification (commonly 5%, 12%, 18% or 28% depending on the product). There is no separate \u201cmanufacturing tax\u201d \u2014 the value addition is captured through the normal output-tax-minus-input-credit mechanism.<\/p>\n Manufacturers can claim ITC<\/strong> on GST paid on raw materials, consumables, input services and capital goods<\/a> used in the course of business, subject to conditions. This ITC is set off against the output GST on finished goods, so tax is effectively paid only on the value added.<\/p>\n Where a manufacturer sends inputs or capital goods to a job worker<\/strong> for processing, GST law has specific provisions allowing goods to move under a delivery challan and be returned within prescribed timelines without treating it as a supply \u2014 important for outsourced manufacturing steps.<\/p>\n No. GST is charged at the rate for the finished goods’ HSN<\/strong>; there is no separate manufacturing tax.<\/p>\n Yes \u2014 on inputs, input services and capital goods used in business, subject to ITC conditions.<\/p>\n Goods can be sent to a job worker under a delivery challan and returned within prescribed timelines without being treated as a supply, subject to conditions.<\/p>\n Running a manufacturing business?<\/strong> TAXAJ handles GST registration, ITC, e-invoicing and returns. Get GST set up with TAXAJ \u2192<\/strong><\/a><\/p>\n Related guides:<\/em> GST registration<\/a> \u00b7 Input tax credit<\/a> \u00b7 GST returns<\/a><\/p>\nInput Tax Credit for manufacturers<\/h2>\n
Job work<\/h2>\n
Key compliance for manufacturers<\/h2>\n
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Frequently asked questions<\/h2>\n
Is there a special GST rate for manufacturing?<\/h3>\n
Can a manufacturer claim input tax credit?<\/h3>\n
How is job work treated under GST?<\/h3>\n
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