Meaning of unregister person in gst reverse charge case
Querist : Anonymous
Please advise about unregistered person under gst reverse charge??
Querist : Anonymous
It is only in case of unregistered person.
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
1) the defination of unregistered person
2) if any supplier or indivisual is registered in gst but gst is not applicable for them as turnover limit not cross then registered person is laible to pay or not???
3) if an indivisual raise invoice with gst amount to a registered person but not deposited gst then who is laible to pay??
### 1. Definition of Unregistered Person under GST
An **unregistered person** under GST is an individual or entity that is not registered under the Goods and Services Tax Act. In other words, they are not required to obtain a GST registration due to the nature of their business, their turnover being below the threshold limit, or other criteria set by the GST law.
**Key Points:**
- **Threshold Limit:** Businesses with a turnover below the prescribed threshold (e.g., ₹20 lakh for most states in India) are not required to register for GST unless they voluntarily opt to do so.
- **Type of Supply:** If a person makes supplies below the threshold and is not registered, they are considered an unregistered person for the purposes of GST.
### 2. GST Liability When Supplier is Registered but Below Turnover Threshold
If a **supplier is registered for GST** but is not required to charge GST due to their turnover being below the threshold limit, the situation is as follows:
- **Registered Supplier Below Threshold Limit:** If the supplier is registered but their turnover is below the limit, they might still have GST obligations based on their registration status. However, they are generally required to comply with GST regulations, including charging GST if applicable.
- **Reverse Charge Mechanism:** In the reverse charge mechanism, the liability to pay GST shifts from the supplier to the recipient of the goods or services. For reverse charge to apply, the supplier must be an **unregistered person**. If the supplier is registered but has not crossed the turnover limit, they are not typically considered unregistered, and hence reverse charge does not apply.
Therefore, in cases where the supplier is a registered person (even if their turnover is below the threshold), the reverse charge mechanism does not usually apply.
### 3. Liability for GST Not Deposited by a Registered Supplier
If a **registered supplier** raises an invoice with GST and does not deposit the GST collected, the liability is generally:
- **Supplier's Responsibility:** The supplier is legally required to deposit the GST collected from the recipient. If they fail to do so, the supplier remains liable to pay the tax to the government, and they may face penalties or legal actions for non-compliance.
- **Recipient’s Responsibility:** The recipient of the goods or services may claim input tax credit (ITC) based on the invoice, provided that the supplier has complied with the GST regulations and deposited the tax. If the supplier fails to deposit the GST, the recipient may face issues claiming ITC.
In summary:
1. **Unregistered Person:** A person not required to register under GST, typically due to turnover being below the threshold.
2. **Registered Supplier Below Threshold Limit:** If registered, GST obligations apply, but reverse charge does not typically apply unless the supplier is unregistered.
3. **Invoice with GST but Not Deposited:** The registered supplier is liable to pay the GST; the recipient's ability to claim ITC might be affected if the supplier fails to deposit the tax.
Understanding these nuances is crucial for compliance with GST regulations and avoiding potential issues with tax liabilities.
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