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Purchase from unregistered dealer

Varun Singh (2 Points)

06 September 2017  
If we made purchase from unregistered dealer, under reverse charge machanism GST is payable. Can we claim Input on such GST?

 12 Replies

srikumar (audit staff) (1162 Points)
Replied 06 September 2017

yes, it will claim to subsequent month

RAJA P M ("Do the Right Thing...!!!")   (115460 Points)
Replied 06 September 2017

I think Yes....

Sumeet (CA) (537 Points)
Replied 06 September 2017

Yes, you can claim ITC of tax paid under reverse charge on purchases from Unregistered Dealer. Also, you can claim the credit in same month (i.e. in the month of purchase).

Kaushik Deepak (KD) (Officer Accountant) (1133 Points)
Replied 06 September 2017

Yes You can claim input tax credit

Pranoti Punmiya (Data Analyst) (158 Points)
Replied 06 September 2017

You can get ITC only if the goods/services are used for business purchase and do not fall in negative list as published by GST law.

ITC will not be allowed if the supply type is Interstate. 

Example: You are regsistered in Delhi.

ITC claim Allowed: If you buy goods from an unregistered supplier within Delhi. (Intrastate)

ITC claim not allowed: If you buy goods from an unregistered supplier outside Delhi. (Interstate) 

Pranoti

Octa GST - Free offline desktop application to file your GST returns

https://octabits.in

 

 

niyaz ansari (students) (30 Points)
Replied 07 September 2017

ITC claim not allowed: If you buy goods from an unregistered supplier outside Delhi. (Interstate) 
Will you clarify this? Is it as per CGST Act or UGST act. I did not found this type of provision in CGST Act.

Pranoti Punmiya (Data Analyst) (158 Points)
Replied 07 September 2017

  • First, in order to make an interstate supply, GST registration is required. So an unregistered dealer cannot supply outside his/her state.
  • In above example, when you are registered in Delhi and you buy something form an unregistered dealer in Rajasthan, then Place of Supply has to be Rajasthan only. This makes it techinically an intra-state sale. But in this case SGST credit of Rajasthan will not be usable because GSTIN is of Delhi registration.

    Pranoti

    Octa GST - Free offline desktop application to file your GST returns

    https://octabits.in

niyaz ansari (students) (30 Points)
Replied 07 September 2017

Suppose an unregistered person sold goods to a regsitered person of Delhi, although he cannot do so as per GST Law but we assume that he did it as he did not know about this provision or we assume him as a layman. and goods are delivered to the purchaser in Delhi. Now in this case what will be place of supply and whether the registered person has the liability to pay IGST or CGST + SGST.

Further as per your example, if a registered person of Delhi purchased goods from unregistered person of Rajsthan and he has to CGST plus Rajsthan GST. now if he registered in Delhi then how he can pay Rajsthan GST i. e. in payment section of GST of a person registered in Delhi he has only option to pay IGST, CGST and Delhi GST. 

Arif Ali (Apt Co Advisory) (1225 Points)
Replied 07 September 2017

Originally posted by : Varun Singh
If we made purchase from unregistered dealer, under reverse charge machanism GST is payable. Can we claim Input on such GST?

 

Yes you will get ITC in which month it is paid.

 

Apt Co Advisory

9910520753

S.Giri (Accoumtant) (89 Points)
Replied 07 September 2017

Thank you to all the peoples given replies

Rahul Katole (PRACTITIONER & FINANCE BLOGGER)   (123 Points)
Replied 26 February 2020

A Jeweller business registered dealer can ITC claimed if some of gold he purchase from unregistered person ( such as. gold buyer person). In this case dealer can ITC Claimed or not ?

RAJA P M ("Do the Right Thing...!!!")   (115460 Points)
Replied 26 February 2020

Yes... ITC can be claim.

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