Goods & Service Tax (GST) 14 September 2026
Tax on Inputs for Exempt Goods Raises Cost Concerns
Companies that make goods or offer services exempt from sales tax still incur tax on the raw materials and other inputs they use, adding an unplanned cost that squeezes profit margins. The alert advises firms to pursue input‑tax credits or adjust processes, and urges regulators to clarify exemption rules.
Businesses producing tax‑exempt goods or services are still charged sales or service tax on the inputs they purchase, creating hidden costs.
- Input tax reduces profit margins and may affect pricing.
- Firms can seek input‑tax credits or restructure supply chains to mitigate impact.
- Regulators may need to clarify exemption definitions.
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