Telangana GST Act, 2017 – Dealers under Industrial Incentive Scheme (T-IDEA Incentive Scheme, 2014) – Purchasing cotton from farmers and paying tax under reverse charge mechanism – Request for clarification whether tax paid under RCM is eligible for certification in Form A - GST - States - A(2)/35/2019

Office of the Commissioner of Commercial Taxes Telangana State :: Hyderabad CIRCULAR CCT s Ref No. A(2)/35/2019, Dt. 27-09-2019 Sub: Telangana GST Act, 2017 Dealers under Industrial Incentive Scheme (T-IDEA Incentive Scheme, 2014) Purchasing cotton from farmers and paying tax under reverse charge mechanism Request for clarification whether tax paid under RCM is eligible for certification in Form A Regarding. Ref: 1. Letter from JC(ST), Warangal Division in RC.No.A(3)/101/2019. 2. GO.Ms.No.28 Industries and Commerce (IP INF) Department Date 29-11-2014. 3. CCT s Ref.No.A(2)/35/2019, date 26-03-2019. 4. Representation of Telangana Cotton Millers and Traders Welfare Association, dated 18-09-2019. The attention of all the Joint Commissioners (ST) is invited to the above subject and references and is informed that tax paid on inputs on reverse charge mechanism cannot be included in Form-A certificate for the purpose of industrial incentive. Para 4.1.7 of GO 2nd cited above reads as, Reimbursement of 100% net VAT/CST or State Goods and Services Tax (SGST) for a period of 5 years from the date of commencement of commercial production. In view of the above the Net SGST is SGST paid by the tax payer only to be included in the Form-A. It is also clarified that the amount paid by the tax payer for the liability towards RCM on cotton shall also not be included in net SGST as the tax payer claims ITC for the same. Sd/- V. Anil Kumar COMMISSIONER (ST)