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Rcm applicability purchase from unregistered

anand sharma (162 Points)

07 February 2019

sir
Please clear that rcm on purchases from unregister dealers to register

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2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (171414 Points)
Replied 07 February 2019

Not applicable at present.

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KAAMIL AHAMADH (ACCOUNTING/TAX CONSULTANCY AND ITR/GSTR FILING) (253 Points)
Replied 07 February 2019

Hi !

As per Sec 9(4) of CGST Act, if a registered person purchases goods/services from an unregistered dealer (URD) then the registered taxpayer is liable to pay GST on reverse charge basis.

All the provisions of the Act will apply to such recipient as if he were the person liable for paying the tax in relation to the supply of goods or services.

This provision will apply if the following conditions are met:

There should be a supply of goods or services

The supply should be in respect of taxable goods/services

Supply must be by an unregistered person.

Supply must be to a registered person

Supply must be an intra-state supply as compulsory registration is required for inter-state sales

Purchasing from Unregistered Suppliers

RCM will not Applicable for Purchases upto Rs. 5,000 per day from unregistered suppliers.

In other words, RCM Applies only if you are dealing with unregistered suppliers and making payments above Rs. 5,000 per day.

hope my answer clears the situation !

Regards
KAAMIL AHAMADH

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