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GST on expenses

JJ Consultants (28 Points)

29 May 2017

if we buy tea from road side stall and show expenses in our firm. should I need to pay gst on tea

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20 Replies

ca praveen jain (partner) (107 Points)
Replied 29 May 2017

As Per Section 9 (4) In Respect of The Supply Of Taxable Goods or Services or Both by a Supplier Who is Not a Registered Person , to a Registered Person shall be Paid By Such Person on Reverse Charge Basis.

so in the light of above provision u are liable to pay GST , if u buy a tea from roadside and show them as expense in ur firm

2 Like

JJ Consultants (28 Points)
Replied 29 May 2017

thanks for your immediate reply

it means that all expenses like office expenses, conveyance charges , stationery purchase, general expenses. postage and courier etc will attract reverse charges?

ca praveen jain (partner) (107 Points)
Replied 29 May 2017

as per my knowledge Yes

if u get services from unregistered person , and u r a registered person

Manish Khimavat (35 Points)
Replied 29 May 2017

so as per section we will have to buy tea from big hotel and for conveyance will have to use Ola, uber only ?

ca praveen jain (partner) (107 Points)
Replied 29 May 2017

sir please don't misjudge the act

if u are liable to pay tax as RCM , act also empower u to take input tax credit of the tax which is paid by u as rcm

means in this case u FIRST pay the tax and after that take credit of the same amount

JJ Consultants (28 Points)
Replied 29 May 2017

yes sir it is similar to section 12 in tamilnadu vat tax.
to pay tax when purchased from unregistered dealers and claim in subsequent month and adjust against tax liability

so it means we need to keep our books updated and expenses entry to be made every month and adjust accordingly instead of year end adjustment

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1443 Points)
Replied 29 May 2017

NO NO NO...............................

Please try to understand the matter.

Reverse charge is not applicable on expenses.

If you are a Manufacturer, Whole Seller or Distributer whatever of TEA and in that case you will purchase TEA from unresitered dealer then you have make the payment of reverse charge.

In sort to say TEA must be your ITEM in your business.

ca praveen jain (partner) (107 Points)
Replied 29 May 2017

sir with due respect please read section 9(4)

"The State tax in respect of the supply of taxable goods
or services or both by a supplier, who is not registered, to a
registered person shall be paid by such person on reverse charge
basis as the recipient and all the provisions of this Act shall apply
to such recipient as if he is the person liable for paying the tax in
relation to the supply of such goods or services or both."

section 9(4) appied on both goods and services.....

Manish Khimavat (35 Points)
Replied 29 May 2017

so as per law we have to pay gst on all our expenses. if yes then who will purchase or take services from unregistered dealers ? and what is the sense of giving them exemption limit of 10/20 Lacs. they will be just killed.

Nilkanth Muley (Software Developer) (81 Points)
Replied 31 May 2017

Sir, Can Goods Sold Returned by Un- Registered Retailer to Dealer, Come under Credit Note (CGST Sec(34) (1)) or Will It be a RCM Invoice for Dealer and he has to pay GST for it.