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Interstate purchase from unregistered dealer

mohammad tarique sohail (accountant) (194 Points)

07 March 2018

I am regular registered in gst but I bought readymade zari goods from unregistered dealer from delhi in december. can I am liable to pay gst 0r exempted in RCM.

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18 Replies

CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 07 March 2018

You have purchased goods from Unregistered dealer as it is an inter state purchase disclose the same in gstr 3b further you can charge GST

Reverse charge mechanism is not present right now need not worry

Gagan Singla (564 Points)
Replied 07 March 2018

the person who is making interstate sale will be penalised as its not allowed if you are unregistered

CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 07 March 2018

gagan sir

unregistered dealer can sale to other states and here query asked person is a registered person

could not understand why penalty has come into place, please elaborate

Mayank Gupta (370 Points)
Replied 07 March 2018

You are not suppose to make inter state purchase from unregistered dealer unless the item purchased is exempted.

CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 07 March 2018

Sir any notification in this regard, i think there is no such notification

Mayank Gupta (370 Points)
Replied 07 March 2018

Kindly see the link here https://cleartax.in/s/reverse-charge-buying-from-unregistered-dealers

CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 07 March 2018

couldn't find any reference sir, any further info

Mayank Gupta (370 Points)
Replied 07 March 2018

Excerpt from the link. Please see last part.

This provision will apply if the below conditions are met:

There should be a supply of goods or services
The supply should be in respect of taxable goods/services
Supply must be by an unregistered person.
Supply must be to a registered person
Supply must be an intra-state supply as compulsory registration is required for inter-state sales.

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 07 March 2018

my view is ,
there is no restrictions on interstate purchase from unregistered dealer. Yes there is restrictions for unregistered dealer that he cannot sell interstate

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CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 07 March 2018

sir you are saying your reference says about reverse charge mechanism and here the discussion is purchase from unregistered dealers.

midhun ramesh (fm) (26 Points)
Replied 07 March 2018

RCM in case of unregistered pary delings is suspaended from 13th oct 2017 to 31st march 2018 so you need not worry in the meanwhile, otherwise it will be taxable and you need to pay IGST

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 07 March 2018

As the suspension for 9(4) is till 31/3/18, as of now there is no further notice , means RCM on 9(4) will get started from 1.4.2028, Now the matter is that if from 1.4.18 , 9(4) section come into force then such purchases (from unregistered, interstate) would be unable book because u have make a self invoice for it, & deposit the RCM on it, but when , while filing return it will not accept POS interstate.

So , it's my point view ,till section 9(4) is suspended , u can purchase interstate from unregistered

Divakar (Student CA Final ) (11857 Points)
Replied 07 March 2018

Plz refer section 24 of cgst act which mandate a dealer to take gst no if he is doing interstate sale.... An unregistered dealer can't sell goods interstate.... So plz refer section 24 of cgst act

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