GST in reverse charge
Mukesh Sharma (B.Com) (42 Points)
17 May 2017could you please explain me, how GST is going to work for reverse charge. like we do in service tax.
Mukesh Sharma (B.Com) (42 Points)
17 May 2017
Ashish Jain
(Chartered)
(37 Points)
Replied 17 May 2017
As of now, Govt has not specified the services to be covered under GST. However, If a registered person purchases goods / avails services from unregistered person then he will be required to pay GST under reverse charge basis. Moreover, the requirement is such that the person paying under reverse charge is also required to issue invoice of good purchased / services availed. Such transactions are to be reported in the return and have to pay tax by 20th of the following month. and such taxes paid will be eligible for credit in the subsequent month. Thereby blocking the working capital to the extent of taxes paid under reverse charge mechanism.
kcagarwal
(chartered accountant)
(103 Points)
Replied 17 May 2017
Reverses charges means if any taxable person under G S T, purchase any item, which is taxable under G S T, ,from the non taxable person, he has to pay gst ,for such purchaes, and issue tax invoice.
rohit
(none)
(186 Points)
Replied 19 May 2017
There is a confusion:
Suppose Mr A has turnover of Rs.5 Lakhs and hence he has not taken registration under GST.
Now Mr. B, a registered person under GST buys Goods worth Rs.1 Lakhs from Mr A , Whether such purchase comes under reverse charge?
If Yes, then it will be a headache for Mr. B
If No, then can anyone explain how it is possible for unregistered person to make taxable supply?
Ashish Jain
(Chartered)
(37 Points)
Replied 19 May 2017
Yes, this is covered under reverse charge as there is no threshhold limit for reverse charge and obviously it will be a headache.
rohit
(none)
(186 Points)
Replied 19 May 2017
That Simply means if Registered person buys a 5 Rs. Pen or 10,000 Rs Mobile for office he will be asked to pay GST and maintain accounting record of each "activity".
Great
kcagarwal
(chartered accountant)
(103 Points)
Replied 19 May 2017
Dear Rohit
In this case, Mr B has to pay reverses charegs on the purchases from Mr A, who is unregistered.
kcagarwal
(chartered accountant)
(103 Points)
Replied 19 May 2017
Mr. Rohit
if you are registered deler , then you have to purchase from registered dealer. However you wll be entitled for G S T refund for that purchase only, which you further resale
rohit
(none)
(186 Points)
Replied 20 May 2017
Dear KC Agarwal Sir,
I think you are talking about Input Credit.
Unlike Service Tax where Reverese Charge (Partial or Full) were on specified categories, GST provisions will push (force) Registered dealers to buy from Registered Suppliers.
Nilkanth Muley
(Software Developer)
(81 Points)
Replied 20 May 2017
In GST There is No Concept of Sale/Purchase, Here is Supply Inward or Supply Outward.
When a Distributor Supply Goods to a Un-Registered Retailer and Retailer Returnd Goods unwanted or Expired/Breakages then Distributor has to take it as Supply Inward with Reverse Charge. Means Un-Registerd Retailer will be in Loss of Double Tax. (1st He can not take credit of Inward Supply and 2nd Reverse Charge Can be Deductable by Distributor for Return).
Means Govt. Want Nobody should be out of GSTN Network.
rohit
(none)
(186 Points)
Replied 20 May 2017
Originally posted by : Nilkanth Muley | ||
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In GST There is No Concept of Sale/Purchase, Here is Supply Inward or Supply Outward. When a Distributor Supply Goods to a Un-Registered Retailer and Retailer Returnd Goods unwanted or Expired/Breakages then Distributor has to take it as Supply Inward with Reverse Charge. Means Un-Registerd Retailer will be in Loss of Double Tax. (1st He can not take credit of Inward Supply and 2nd Reverse Charge Can be Deductable by Distributor for Return). Means Govt. Want Nobody should be out of GSTN Network. |
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Supply goods on "Sale on approval basis".
Nilkanth Muley
(Software Developer)
(81 Points)
Replied 20 May 2017
In Pharmaceutical / FMCG Sector Goods Return transaction happen at multiple times from any
Invoice. Supply can not be On Aproval basis here. Pharmaceutical Distributor has to take return Expired/Breakage/Spoild Goods also from Retailer due to their Association Pressure.
rohit
(none)
(186 Points)
Replied 20 May 2017
Originally posted by : Nilkanth Muley | ||
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In Pharmaceutical / FMCG Sector Goods Return transaction happen at multiple times from any Invoice. Supply can not be On Aproval basis here. Pharmaceutical Distributor has to take return Expired/Breakage/Spoild Goods also from Retailer due to their Association Pressure. |
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I do understand your concern, like expired stock.
Though exchange of goods will come under supply, i have reservations about stock return as these are not for "consideration".
I believe these things are for Industry representatives to bring to notice of GST Council/ Government.
Also many people like me and you are enhancing knowledge so that we find solutions to problem that come up.
Nilkanth Muley
(Software Developer)
(81 Points)
Replied 20 May 2017
Disposal of Goods is also come under Supply Defination. Confirm by Mr.Upender Gupta CA IRS
GST Council Member.
rohit
(none)
(186 Points)
Replied 20 May 2017
That is for disposal of "Business Assets" on which ITC was availed. [Schedule 1 CGST Act, 2017]
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