Gst liabilities
This query is : Resolved
19 April 2019
Q1. Who is liable to pay GST?
(a) Unregister GST Person (b) End user of product or service
(a) Unregister GST Person (b) End user of product or service
20 April 2019
Neither unregistered person nor end user of product is liable to pay GST to Authorities .
GST Registered person is liable to pay
GST Registered person is liable to pay
20 April 2019
I miss ward ACTUAL. My question is Who is actual liable to pay GST?. GST Registered person collect GST from individual or unregister person. He is not paid GST in his own pocket.
20 April 2019
GST registered person will collect GST from the person he supplies the goods / Services .
It can be unregistered person or end user of the product
It can be unregistered person or end user of the product
28 May 2019
I think audit fees bill is also a end service bill why business get benefit of GST, but in same condition common man not get benefit of GST Why?
26 July 2024
### Understanding GST Liability and Payment
**1. **Liability to Pay GST**
**a. **Who is Liable to Pay GST?**
1. **Registered Person (Supplier):**
- Under the GST framework, the supplier of goods or services who is registered under GST is responsible for collecting GST from the recipient (buyer) and remitting it to the government. The registered supplier issues a tax invoice including GST to the recipient and collects the tax as part of the invoice amount.
2. **End User (Consumer):**
- The end user, or the final consumer, does not directly pay GST to the government. Instead, they pay the GST as part of the price of goods or services they purchase. This means that while the end user is not directly liable to pay GST to the government, they bear the tax burden as part of the purchase price.
3. **Unregistered Person:**
- An unregistered person (supplier) is not liable to collect and pay GST. However, if an unregistered person is providing services or selling goods to a registered person, the registered person must account for GST under the Reverse Charge Mechanism (RCM), where the recipient pays the tax instead of the supplier.
**b. **Practical Illustration:**
- **Registered Supplier:** A GST-registered business sells a product worth ₹10K with a GST of 18%. The business collects ₹11.8K from the customer (₹10K + ₹1,800 GST) and remits ₹1,800 to the government.
- **End User:** The end user pays ₹11.8K but does not directly handle GST payments to the government. They pay the GST-inclusive price to the supplier.
- **Unregistered Supplier:** If an unregistered person sells goods or services to a registered business, the registered business has to pay GST under RCM and report it in their GST returns.
### **2. **Benefits of GST for Businesses vs. Consumers**
**a. **Input Tax Credit (ITC):**
- **Businesses:**
- Registered businesses can claim Input Tax Credit (ITC) on the GST paid on inputs (raw materials, services) used in their business. This helps in reducing the cascading effect of taxes and lowering the overall tax burden on businesses.
- For example, if a business pays ₹1,800 GST on raw materials, it can claim this as ITC, which reduces its GST liability on the sale of finished goods.
- **Consumers:**
- Consumers do not get ITC benefits as they are the final consumers of goods or services. They bear the GST as part of the price of the product or service without the benefit of reclaiming any tax.
**b. **Audit Fees and Business Expenses:**
- **Audit Fees:**
- Businesses can claim ITC on audit fees if these are related to their taxable activities. This is because the audit fees are considered a business expense and GST on such services can be claimed as ITC.
- **Consumers:**
- A common consumer does not receive ITC benefits as they are not involved in taxable business activities. They bear the cost of GST directly as part of their purchase.
### **Summary**
- **Liability to Pay GST:**
- **Registered Suppliers** collect and remit GST to the government.
- **End Users** (consumers) indirectly pay GST as part of the purchase price but do not pay GST directly to the government.
- **Unregistered Suppliers** are not liable to collect GST, but registered recipients may need to pay GST under RCM.
- **Benefits of GST:**
- **Businesses** benefit from ITC on GST paid on inputs, reducing their overall tax burden.
- **Consumers** do not get ITC benefits and bear the GST as part of their purchase cost.
The GST system is designed to ensure that the tax burden is effectively managed across the supply chain, with businesses handling the tax collection and remittance, while consumers indirectly bear the tax cost.
**1. **Liability to Pay GST**
**a. **Who is Liable to Pay GST?**
1. **Registered Person (Supplier):**
- Under the GST framework, the supplier of goods or services who is registered under GST is responsible for collecting GST from the recipient (buyer) and remitting it to the government. The registered supplier issues a tax invoice including GST to the recipient and collects the tax as part of the invoice amount.
2. **End User (Consumer):**
- The end user, or the final consumer, does not directly pay GST to the government. Instead, they pay the GST as part of the price of goods or services they purchase. This means that while the end user is not directly liable to pay GST to the government, they bear the tax burden as part of the purchase price.
3. **Unregistered Person:**
- An unregistered person (supplier) is not liable to collect and pay GST. However, if an unregistered person is providing services or selling goods to a registered person, the registered person must account for GST under the Reverse Charge Mechanism (RCM), where the recipient pays the tax instead of the supplier.
**b. **Practical Illustration:**
- **Registered Supplier:** A GST-registered business sells a product worth ₹10K with a GST of 18%. The business collects ₹11.8K from the customer (₹10K + ₹1,800 GST) and remits ₹1,800 to the government.
- **End User:** The end user pays ₹11.8K but does not directly handle GST payments to the government. They pay the GST-inclusive price to the supplier.
- **Unregistered Supplier:** If an unregistered person sells goods or services to a registered business, the registered business has to pay GST under RCM and report it in their GST returns.
### **2. **Benefits of GST for Businesses vs. Consumers**
**a. **Input Tax Credit (ITC):**
- **Businesses:**
- Registered businesses can claim Input Tax Credit (ITC) on the GST paid on inputs (raw materials, services) used in their business. This helps in reducing the cascading effect of taxes and lowering the overall tax burden on businesses.
- For example, if a business pays ₹1,800 GST on raw materials, it can claim this as ITC, which reduces its GST liability on the sale of finished goods.
- **Consumers:**
- Consumers do not get ITC benefits as they are the final consumers of goods or services. They bear the GST as part of the price of the product or service without the benefit of reclaiming any tax.
**b. **Audit Fees and Business Expenses:**
- **Audit Fees:**
- Businesses can claim ITC on audit fees if these are related to their taxable activities. This is because the audit fees are considered a business expense and GST on such services can be claimed as ITC.
- **Consumers:**
- A common consumer does not receive ITC benefits as they are not involved in taxable business activities. They bear the cost of GST directly as part of their purchase.
### **Summary**
- **Liability to Pay GST:**
- **Registered Suppliers** collect and remit GST to the government.
- **End Users** (consumers) indirectly pay GST as part of the purchase price but do not pay GST directly to the government.
- **Unregistered Suppliers** are not liable to collect GST, but registered recipients may need to pay GST under RCM.
- **Benefits of GST:**
- **Businesses** benefit from ITC on GST paid on inputs, reducing their overall tax burden.
- **Consumers** do not get ITC benefits and bear the GST as part of their purchase cost.
The GST system is designed to ensure that the tax burden is effectively managed across the supply chain, with businesses handling the tax collection and remittance, while consumers indirectly bear the tax cost.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on capital gains revoked us 54f
- Refund of AY 22-23
- Should I include march foreign salary received in April in my income for FY 2023-24?
- HSN Details in IFF/GSTR-1 & in GSTR 9
- Inventory of finished goods
- GST APPLICABILITY ON POLLUTION CHECK SERVICE
- Company Incorporation - CA and directors signing from different states
- Applicability of Ind As to associate of associate
- Confusion around Form 26QB fields
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- Return material
- TDS is applicable on payment of Fix Meal
- Form ITC 04
- TDR receipts for agreement holder
- Point (III) 9 of GSTR-9C
- MIS MATCH OF INVOICE NUMBER
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
Trending Online Classes
CAclubindia
