Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Urd to urd interstate

Shivani (Learner) (1881 Points)

19 June 2018

Dear Friends

A of Delhi make a supply to B of Punjab

A is unregistered

B is unregistered

Now in this case as soon as A made an interstate supply he is liable to get himself registerd under GST within 30 day of making supply.

My question is what about IGST in this case?

Since at the time of making supply, A was not registered he issued a simple invoice (not TAX invoice), as he couldnt charge tax being unregistered at that time.

Now once he gets registration, can he issue debit note to B and recover IGST for the supply made earler.

Regards

Shivani

Reply
Follow
Share

30 Replies

Ravi SADhiyan (Practice) (4510 Points)
Replied 19 June 2018

Notified persons may also be granted an exemption from registration. In this regard, the
Government has exempted the following persons from obtaining registration:

(c) Persons effecting inter-State supplies of taxable services – where the aggregate value of supplies on PAN-India basis does not exceed 20 Lakh in a year (10 Lakh for Special Category States) (w.e.f. 13.10.2017) - Notification No. 10/2017 – Integrated Tax dated 13.10.2017.

Upgrade to CAclubindia Pro. Subscribe Now!

Shivani (Learner) (1881 Points)
Replied 19 June 2018

Dear Ravi

Please reply considereing teh supply to be of GOODS and NOT SERVICES.

regards

Shivani

CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 19 June 2018

He is required to issue a revised tax invoice as per rule 53(2).

Ravi SADhiyan (Practice) (4510 Points)
Replied 19 June 2018

Originally posted by : Shivani
	Dear Friends A of Delhi make a supply to B of Punjab A is unregistered B is unregistered Now in this case as soon as A made an interstate supply he is liable to get himself registerd under GST within 30 day of making supply. My question is what about IGST in this case? Since at the time of making supply, A was not registered he issued a simple invoice (not TAX invoice), as he couldnt charge tax being unregistered at that time. Now once he gets registration, can he issue debit note to B and recover IGST for the supply made earler. Regards Shivani

He can't issue Tax invoice at the time when he is URD

And He is not issued Debit note after Registration under GST

32. Prohibition of unauthorised collection of tax
(1) A person who is not a registered person shall not collect in respect of any supply of goods or services or both any amount by way of tax under this Act.

(2) No registered person shall collect tax except in accordance with the provisions of this Act orthe rules made thereunder.

CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 19 June 2018

Read rule 53(2)--Circumstance under which revised tax invoice can be issued is clearly mentioned.

Upgrade to CAclubindia Pro. Subscribe Now!

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 19 June 2018

Originally posted by : Shivani
	Dear Friends A of Delhi make a supply to B of Punjab A is unregistered B is unregistered Now in this case as soon as A made an interstate supply he is liable to get himself registerd under GST within 30 day of making supply. My question is what about IGST in this case? Since at the time of making supply, A was not registered he issued a simple invoice (not TAX invoice), as he couldnt charge tax being unregistered at that time. Now once he gets registration, can he issue debit note to B and recover IGST for the supply made earler. Regards Shivani

The transaction is not valid...

If he will supply to inter state then he must register before supplying the Goods

1 Like

Vinod Babu (24191 Points)
Replied 20 June 2018

Yes agree with Raja sir.
Cannot issue tax invoice without gst registration.

Shivani (Learner) (1881 Points)
Replied 20 June 2018

Dear Raja Sir

I strongly disagree with you.

No one prohibts an unregistered person to make an inter-state supply.

That would be just naive.

Who is government or GST to tell a person how to run his business - to prohibit him from making inter-state supply.

The GST law only says that once you make inter-state supply, you must get yourself registerd under GST law within 30 days of making inter-state supply.

You dont need to wait for GST registration to make inter-state supply.

Dear Ravi

Yes unregistered person cant collect tax and thats what Mr A did in our example. He didnt collect tax. However he became liable to get registered with effect from the date he made interstate supply. Registration once granted will be effective from date from which he became liable for registration i.e. date when he made inter-state supply.

hence he needs to pay govt IGST.

Dear shivam

I agree with you.

My questions to you are:

Are these revised tax invoice called debit note?

How will Mr. A collect tax from teh supplies he made to consumers i.e. the ones who have no GSTIN - people like you and me?

regards

shivani

CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 20 June 2018

No it is called revised tax invoice only. Heading should be 'revised tax invoice' or simply 'Tax invoice'. I know practically it is not possible to collect from unregistered person. So whatever you have collected, you should treat the amount as inclusive of tax. Now you back calculate and raise the revised tax invoice accordingly.

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 20 June 2018

Section 24 : “Compulsory Registration in Certain Cases” (CGST Act, 2017)

Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,–

(i) persons making any inter-State taxable supply;

(ii) ...........

Upgrade to CAclubindia Pro. Subscribe Now!

Vinod Babu (24191 Points)
Replied 20 June 2018

Good explanation sir

CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 20 June 2018

Also read section 25(1). Shivani's question is not about registration but about inter-state supply during those 30 days mentioned in section 25(1) and issue of revised tax invoice thereof.

Exmaple:- Suppose you are unregistered person in Kolkata. Your friend's relative(also unregistered) in Delhi wants to purchase some goods from you and so he placed an order on 20.6.18 and he asks you to deliver on 23.6.18. Now you are unregistered and you know that if you make an inter-state supply you have to apply for registration within 30 days under GST law. You supply the goods with normal invoicing of Rs. 11800/- on 23.6.18. Now after this he applies for registration on 26.6.18 with date of liability on 23.6.18 and was granted registration cetificate on 1.7.18.

Since his date of liabilty is 23.6.18 he should have raised tax invoice, but he couldn't as he was unregistered. So after 1.7.18 he will issue revised tax invoice for all the supplies made during 23.6.18 to 30.6.18..For inter-state supply made on 23.6.18 to Delhi he will back calculate the figure and issue a revised tax invoice---Say GST applicable @ 18%...Thus basic value =10000 and IGST =1800. This is as per rule 53(2).

From 1.7.18 onwards he will issue normal tax invoice under GST law.