Rcm - tricky

Dear Pankaj

its totally wrong that an unregistered person cannot make an interstate supply.

also just because reverse charge under section 5(4) has been held in abeyance doesnt mean we shouldnt be prepared to deal with it if an when it does come into picture again.

My query remains open.

I request members to please throw some light on what needs to be done in such a situation.

regards

shivani

The purpose of adding section 5(4) is unknown to all. I guess it is an error on the part of the lawmakers . It has been kept in abeyance and I think it will be removed in the next GST council meeting.

first, rcm is deferred till 30-09-2018 so no need to pay gst tax under rcm 

and why revised invoice after registration 

No , not at all 

and X has to pay tax under RCM if applicable ,(CURRENTLY DEFERRED) and take credit in same month of RCM paid 

DEAR SHIVANI

AS PER SECTION 24(1) CGST ACT THE URD CANNOT SELL INTERSTATE (GOODS), OR HAS TO TAKE REGISTRATION COMPULSORY

AND

I HAVE ALREADY REPLIED YOU BY SUPPOSING THAT IN FUTURE THE 9(4) SUSPENSION WILL BE WITHDRAWN , I THINK YOU HAVE NOT GONE THROUGH THE SAME

NAVEEN JI

AS PER CLAUSE 3(a) OF SECTION 31 CGST ACT, a registered person may within one month from the date of issuance of registration certificate  can issue a revised invocie againt the invocie already issued during the period beginnig with the effective date of registration till the date of issuance of certifcate

so my point is simple THE Receipient  will reverse the RCM DEPOITED  (SELF INVOCIE) in next month return AND claim the ITC on revised invocie issue by URD(NOW REGISTERED) & same will also going to be reflected in GSTR2A of receipient

ya agreed !!

Dear Shivam

What problem do you see with section 5(4)?

Both of us agreed in one earlier query of mine on this forum that an unregistered person can make an interstate taxable suppply albeit he must take registration after that.

So if Y has made interstate supply in my example above to X, then X can simply deposit tax under RCM under section 5(4) of IGST Act.

Later Y after taking registration can issue revised invoice to X only showing the taxable value of goods supplied and NOT tax since tax has already been paid by Y under RCM.

Where do you see the fault with it?

Regards

Shivani

Dear Shivam

The date of liabiity mentioned in the registration certificate is the date when a person is liable to get himself registered which in our case is when this unregistered person made an inter-state supply to a registered person.

However tax is liable to paid by the recipient under section 5(4) of the IGST Act.

The criteria of getting registered is when you make an interstate taxable supply and not who is paying tax.

Please revert if differ.

regards

shivani

Date of liabilty decides the effective date of registration. For example-

Inter-state supply made on 16/7/18

Application for registration made on 17/7/18

Registration certificate granted on 22/7/18

Date of liability mentioned in the certificate-16/7/18(Info filled while making application)

Thus effective date of registration is 16/7/18.

Person liable to pay tax on all outward supply made on or after 16/7/18.

Thus he will issue revised tax invoice and discharge the tax liabilty for the supply made on 16/7/18.

Now if we go as per your view that tax is to be discharged by the recepient u/s 5(4), then there will be double taxation on the same transaction. 

I have tried to figure out the purpose of section 5(4) and i think it is for supply of goods/service from foreign country to India where it does not amount to import of goods/service respectively. This is the sole purpose of section 5(4) according to me.

ya i also thought about the double taxable aspect.

but the law mentions "revised invoice" and not "revised tax invoice" and it is not compulsory for him to issue revised invoice either as the word used is may and not shall.

ball in ur court.

waiting