There are some monetary disadvantages in dealing with unregistered dealers in Goods and services tax as it will be completely opposite for a beneficial deal for all those registered dealers. There is some persistent question regarding the anonymity of unregistered dealers in the GST. Some of the questions are framed here to acknowledge the general queries regarding the transaction with the unregistered dealer.
Q: What is RCM provision and according to this what are the consequences if the purchase is made from unregistered dealers?
A: RCM provisions stands for reverse charge mechanism which is utilized for the tax payment made by the recipient on the purchase of any good or service. RCM also explains that tax is paid by the opposite party and this is implied in the case of unregistered dealer also. The reverse charge already finds its place in service tax provision and has been included in the GST also making necessary for all the dealers to pay taxes based on reverse charge.
Q: In reverse charge mechanism, what will be the duration of supply in a matter of purchasing of goods?
A: The duration of supply in a matter of purchasing of goods in reverse charge mechanism will be earlier in the following:
The date of receipt of goods or
- Date on which payment is made or
- The date immediately following 30 days from the date of issue of invoice
Now take an example that if a taxpayer’s purchase some goods on 25 July and present the bill on 2nd august and for the same the consideration is paid on 28th august than the provision of RCM will deem 25 July as a time of the supply.
Q: What will be the case in services for the time of supply in RCM?
A: In this case, the following scenario will be applicable:
- The date on which payment is made
- The date immediately following 60 days from the date of issue of invoice
Q: What will be the case for GST paid in RCM whether the credit will be allowed or not?
A: As per the GST provisions, each taxpayer can take the input tax credit but in order to avail the credit of tax paid, first he has to pay the taxes to avail the credit on all those purchases in the next month. In the provisions it is clearly mentioned that GST credit cannot be availed on food and beverages, building, passenger vehicle even if the tax is paid on R.C.M basis that means the burden of such tax shall be borne by the taxpayer.
Recommended: GST Refund Procedure Under Goods and Services Tax India
Q: What changes can RCM bring after the implementation of GST?
A: The RCM can significantly increase the number of taxpayer base in India while it also mentioned that purchases made from an unregistered dealer can prove expensive for the registered dealer. This will be attracting reverse charges in case if any dealers make transactions with an unregistered dealer.
Sir, I have availed a composition scheme since 1 April 2019 as my turnover is below 75 Lacs. I Purchase items from local workshops and unregistered suppliers as well as a few registered suppliers also. I resale / supply them to Automobile dealers, Few Govt Dept. ST bus depot etc.
How much tax I would be paying? 1% only or do I require to pay tax on purchase from the unregistered supplier as well? What is the suitable Software for me to handle my business?
Thanks and Regards.
Yes, you need to pay tax on purchases also, Gen GST software is the best one to handle all such issues
dear sir,
I am a unregistered dealer, how can i prepare invoice with GST or without GST.
How you manage your books of Accounts?
Suppose if I purchase furniture, like desks from unregistered dealers, and supplies them to government. And if I make the payment to the supplier during next year. And If I pay GST on purchases from unregistered dealers on RCM basis at 18% of the value of U.R.D. Purchases. Can I Claim input tax credit on RCM paid on unregistered purchases if I make the payment in the next financial year?
One can claim ITC only if paid within 180 days not next financial year
Hi Sir,
I’m a Registered Dealer. and purchased stock wholesale from UN- Registered Dealer (RCM Transaction) and sold to Registered Dealer.(B2B Transaction)
My question is if I sell goods to (B2B) in which invoice RCM to be marked as “Yes” or No”
please explain in brief how to file the return for this transaction and help me with invoicing and filing software
In GSTR-1 B2B transaction, it should be marked with RCM “NO” as the transaction done between you and purchaser is not related to RCM transaction, although you have purchase the goods from unregistered dealer. You can use our Gen GST software for the same for ease of your working
Sir Thanks , for quick response can you please provide a demo for Gen GST software
Hi if the registered seller sells goods in GST bill to an unregistered Seller without pan card Aadhaar card and any banking cheques at credit is it safe that the registered seller will have the power to recover the amount he sold the good to that unregistered buyer.
There is no provision in GST to recover the amount from the buyer, it depends on your credibility to recover the amount
Hello, I am an unregistered seller. I am purchasing goods from the registered dealer but I am in doubt that dealer is manipulating tax invoice i.e he is cancelling unregistered buyer bill and amount of GST I am paying as per invoice is getting in his pocket. How may I check is he really cancelling bill of an unregistered buyer?
There is no such option to track transactions made by unregistered dealers.
Dear Sir,
There was some registered sale from July`17 to Nov`17 but due to wrong information, we put these sales to unregistered party in GSTR1 return. can we rectify the same in GSTR1 in next month?
Yes, you can make changes only in next month’s return.
Suppose a registered dealer has purchased goods from an unregistered dealer of other state not knowing the rules that time. what can be done now.
If it is for same tax period, you can deposit the tax under RCM before filing for the return for the tax period. If it relates to earlier tax period, then you can still deposit the tax under RCM with interest and make the changes related to earlier period, in current return.
I am registered supplier. I sales unregistered & composition customers by issue tax invoice, then they are sales return goods, so how can I accounts credit note issue GST charge.
The credit note is required to be issued in this case. separate columns have been provided for mentioning the details of sales return in the return forms.
I sold Goods of Rs 1000 to unregistered Dealer and Charge GST @18%, now he want to return goods of Rs. 500. Can i take material as sale return?? what will be the tax treatment in this case??
Yes, you can take sales return, and you need to issue credit note to customer in this case to lower down the GST liability.
I am dealing in Natural rubber. Most of my purchase is from Unregistered dealer. Am i comes under RCM as rubber is not listed Cashew nuts, not Notification No.4/2017-Central Tax Rate.
In case of purchase from unregistered dealers, RCM applies.
2 to 3 bank details means for the purpose of rtgs transfer i wish to give choice of two different banks ifsc codes etc / or one is sufficent
Yes, it is available in Gen GST software.
What is the limit for cash sale to a single party on a single day under present act and details of purchaser to be mentioned in invoice during cash sale.
IN CLEAR TAX SOFTWARE, CAN WE CUSTOMIZE THE SALES INVOICE LIKE DISCOUNT IN % , BILLING FOR APPROX 10TO 12 ITEMS IN ONE BILL OF DIFFERENT GST RATES, ALONG WITH SOME RCM ,ALSO GOODS ITEMS WITH SERVICE ITEMS. AMOUNT WITH PAISE , ROUND OFF ETC
2 TO 3 BANK DETAILS, WILL I GET TECHNICAL SUPPORT FOR INSTALLATION AND TO CUSTOMIZE THE REQUIREMENTS IN SALES INVOICE, ETC
Yes, These features are available in SAG GST software but please clarify “2 TO 3 BANK DETAILS”.
i have opted for deregistration since my t/o is below 10 lakhs. how do i do interstate purchases without gst no. my ca in Karnataka says its possible while my up wholesaler refuses to send
If a vendor who is not registered under GST, supplies goods to a person who is registered under GST, then Reverse Charge would apply. This means that the GST will have to be paid directly by the receiver to the Government instead of the supplier.
Points to keep in mind:
An unregistered dealer cannot make interstate supplies. This means that Reverse Charge in this case will apply only in case of intra-state supply by an unregistered dealer.
Only if the total supply from unregistered person exceeds Rs 5,000 in a day, then reverse charge will be applicable (Notification No.8/2017-Central Tax)
i am a registered dealer, i buy some goods or some services from unregistered dealer who is below 20 lacs, he does not give bill. and the same item is sold to end user , how do i bill the end user and what will be my tax liability to govt, and also if i purchase from composite dealer some goods or some services, he give me a bill, and same items or services are sold to end user say to govt dept , how do i account these transactions in my books under gst ( i order for some office seals or print some letter heads for govt dept, which is usually done by unregistered dealers , no bills for the same is given by , and same is supplied to govt dept as i am supplier to govt department)
You have to charge GST at the rate applicable to your goods or services and you cannot take input tax credit and ITC is also not available in case of purchase from Composition dealer.
Sir I am registered dealer, I have distributorship of some products. I have receive commission after achieve sales target and monthly and quarterly basic so mu question is can i sell my product less then purchase value.
Sir, I am a registered dealer and most of my purchase is inter state (tax free). I receive the goods via transport (transportation is charged anywhere between Rs.5000 to Rs.15000 depending on load). My question is:
1) Whether GST is applicable on such Transportation of goods where the transporter has issued transportation bill but not mentioned GST applicable. If yes then at what rate and who is liable to pay the applicable GST?
2) Some interstate transporters charge GST in their transport bill itself then can i avail ITC if interstate transporter charges GST in its bill?
3) What is the scenario of GST on Transportation charges paid to local transport (who only deals intra-state)?
Thank you in advance.
SIR I BUY SNACKS ITEMS AT WHOLESALE AND SELL THEM TURNOVER LESS THAN 20 LACKS. WHAT DO I REQUIRE WHEN I MAKE DELIVERY OF GOODS
In case if registration is not opted for then, invoice can be issued without tax amount. If registration is opted for then tax invoice has been issued.
I AM REGISTERED DEALER FOR FMCG PRODUCT WE HAVE WORKING IN VILLAGE AREA THROUGH VAN CAN WE MOVE OUR GOODS SELF CHALLAN WITH MANUAL BILL BOOK FOR VILLAGE SUPPLY.
if registered dealer sells goods to unregistered …will i have to give invoice wise detail of sale in GSTR 1 or consolidated sales of month
Sale to unregistered dealer upto Rs 2.5 lacs, consolidated amount is to be filled in return.
I am composition dealer when I purchase goods from unregistered dealer then what tax will pay in that purchase. Is it 1% or normal rate of tax
In case reverse charge mechanism becomes applicable on composition dealer, then tax as per normal tax rates has to be paid rather than the composition rates.
I HAVE TO SELL GOODS TO NON REGISTERED PARTIES ..WHICH INOVICE TO BE ISSUED AND WILL I HAVE TO UPLOAD IT WHILE FILING GST RETURN.
In case of sale to unregistered dealer, invoice must mention that tax under reverse charge is applicable. So tax invoice has to be issued. Credit will be allowed to the recipient of the tax paid.
How can we sell unregisterd medicine retailers
I provide accounting services to a private limited company (registered under GST) within the same state. As my annual billing to the pvt ltd company does not excess Rs. 5 lacs I am not registered under GST. Will reverse charge be applicable to the pvt ltd company for availing such services from me?
Yes, reverse charge will be applicable.
We have received June month bill from cab service on 10.07.2016 which was earlier paid under RCM basis. Now i cant pay service tax on RCM basis. Can you give solution how to go about ?
Point of taxation generally as the earlier of the following events:
we can infer that even though the service is completed on a particular date, the levy is either advanced or deferred to the date as determined based on POTR. Levy need not coincide with the completion of service. As service ‘provided’ is taxable as well as service ‘agreed to be provided’ is also taxable.
SIR I AM A REGISTERED DEALER OF ODISHA AND I WANT TO PURCHASE FROM AN UN REGISTERED OF THE SAME STATE NOW INVOICE OR DOCUMENT TO BE MAINTAIN FOR THE TRANSACTION
In case of purchases from unregistered dealer, reverse charge mechanism applies. The invoice must mention that the tax under reverse charge has been paid. The liability in that case shifts on the recipient of the goods
Please send the Purchase invoice format which to be issue the UN read. Dealer
Download from here: http://blog.saginfotech.com/gst-purchase-bill-its-format-india
Sir ,
I am a registered jeweller , if Customer comes to me with old 10gm chain in return he wants to purchase new 25gm necklace what will be the tax applicable?
1.I should purchase 10gm chain from him and add 3%gst to him or i should purchase it without gst and add 3%gst to only 25gm new necklace.
SIR please explain me how much gst should i charge from Customer & what input tax i will get
GST is chargeable on the transaction value. Transaction value includes the value of the goods which are under exchange. So GST is chargeable on the amount charged plus the value of the goods exchanged.
1. I AM REGISTERED DEALER IN GUJARAT AND I WANT TO PURCHASE MATERIAL FROM OTHER STATE UNREGISTERED DEALER .IT IS POSSIBLE OR NOT?
2. WHAT INFORMATION MENTION OF UNREGISTERED DEALER IN GSTR-1 AND GSTR-2 .
In case of purchases from unregistered dealer reverse charge mechanism is applicable. However in case of interstate sale purchase, registration under GST is mandatory. No ceiling limit has been prescribed for registration in case of interstate sale purchase.
Kindly clarify, sales made by a registered dealer to unregistered dealer
I am a register dealer, Can i sale to unregistered dealer or retailer, if so then what will be the limit?
yes, sales can be made to unregistered dealer by registered dealer by issuing tax invoice but no limit as to sales has been specified.only limit for registration has been specified as Rs 20 lakhs.
I am registered dealer, but my all retailer unregistered. B2b filing gst NO. K bina nehi save ho raha Hain.
In that case you need to fill data in B2C field.
Sir, I am airtel prepaid distributor and register but seller non register . toh hamko b2b/ b2c kaha data fill Kare?
What will happen if unregistered retailer purchased from unregistered dealer and ultimately sold to ultimate consumer. Who will pay GST in that case?? How GST will be implemented in that case and how credit would be taken??
Unregistered dealer cannot charge GST in bill. So question of credit will not arise and also they cannot charge GST from consumer also.
my query is what if all my buyers have turnover less than 20 lakhs which means that they do not require to be registered so being a registered dealer what responsibilities would i have regarding his tax liabilities. do i have to pay any of his share of taxes or just charge him my share and show sales and pay just my share.
Under GST if you are registered taxable person then you have to charge only the GST rate which is applicable to the goods and services which you sale or provide.
I have read the post about R.C.M. but didn’t understand well as have never come across such earlier will go through again, I have a query of what are disadvantages of selling goods to unregistered realer.
Also could you elaborate on GST TRANS-2.
We purchase goods with 2% CST from out station, and sale local VAT 14.5%. Could you provide us insight how to go about?
sir,
I asked one question, If I purchased from Composition dealer that is not TAX invoice then i will pay RCM this product.
No, You don’t have to pay on RCM basis.
What will be treatment of stock in business purchased before 1 July 2017. We have both invoices where excise duty 12.5 % shown separately in bills and also including 12.5 % excise duty paid bills where prices are inc of excise duty .Our purchases are from company situated in Maharashtra and my business place is in Guwahati, Assam . We purchases in 2 % cst . We will get any compensation on stock of goods wit us where 12.5 % excise and 2 % CST paid on stock wit us as on 1, July 2017 when gst starts.
Sir you have to file GST TRANS-2 within 60 days of implementation of GST for ITC.
You will get benefit of excise paid on the stock lying and you can claim credit. However towards CST you will not get benefit. it will be cost to u.
I am a registered person , but my customer is not registered. Can I supply goods to unregistered dealer in case of inter state supply ?