GOVERNMENT OF INDIA
OFFICE OF THE COMMISSIONER
GST COMISSIONERATE, BELAPUR
1st FLOOR, CGO COMPLEX. CBD BELAPUR, NAVI MUMBAI-400 614.
F.No.11/36-25-GST/Queries/Be1/17/28/794/31.03.17
Dated: 30.08.2017
To
The Grain, Rice & Oilseeds Merchant’s Association
A/2/1, Groma House, 2nd Floor, Plot No.14-C,
Sector-19,Vashi,
Navi Mumbai-400 703.
Gentlemen,
Sub: Written clarification regarding applicability of Section 23 & 24 of CGST Act-reg.
Please refer to your letter No. GROMA/2017-18/135 & 136 both dated 18.8.2017 on the above mentioned subject.
In this regard, it is to inform you that all the queries raised are cleanly and unambiguously covered in the related statutory provisions. The desired reply to the relevant statutory provisions are mentioned point wise below against each query.
a. Whether we are entitle to surrender their registration U/s 23 of CGST Act, when they are dealing exclusively in Exempted Goods & services?
Reply:- Yes, Please refer Rule 24(4). As per Rule 24(4) of CGST Rules, 2017 “every person registered under any of the existing laws, who is not liable to be registered under the Act may, within a period of thirty days from the appointed day at his option, submit an application electronically in FORM GST REG-29 at the common portal for the cancellation of registration granted to him and the proper officer shall, after conducting such enquiry as deemed fit, cancel the said registration.
b. They all are dealing in Inter-state (out of Maharashtra) as well as Intra state (within Maharashtra) purchase & sale of exempted goods. Whether they are entitled to Surrender their GST Registration considering provisions of section 24(i) of CGST Act?
Reply- Compulsory registration provision u/s 24(i) applies on persons making any inter-state taxable supply.
c. There is lack of awareness at all levels dealing with person unregistered U/s 23 of CGST Act right from Suppliers (Millers), Transporters Buyers (Retailers) within state as well as outside Maharashtra state. They simply refuse to deal with unregistered dealers under GST. Hence you requested to clarify that neither there are any restrictions nor any additional compliances in dealing with dealers unregistered U/s 23-of CGST Act.
Reply: Section 23 & Section 9(4) are amply clear and unambiguous. There is no provision putting any such restriction on dealing with an unregistered buyer who is pot liable for registration under the extant provisions of GST Law. The statutory prescriptions under the said Sections 23 & Section 9(4) themselves are the authority in the matter. The same may be cited to those who, probably due to ignorance of the provision, may be hesitant to deal with unregistered persons.
d. If you are surrendering your registration u/s 23 of CGST Act & become unregistered dealer, then whether provisions of section 9(4) of CGST Act are applicable to you? i.e. whether you are liable to pay GST under reverse charge u/s 9 (4) for taxable goods as well as services received (Purchased) by you from unregistered dealer (as this will become transaction from unregistered dealer to unregistered dealer)
Reply: Section 9(4) does not apply to supply procured by an unregistered person from another unregistered person.
Yours sincerely,
(R.K.Mishra)
Commissioner
This is wrong interpretation of the law. Wholesale dealers in exempt food grains or other material are liable to pay GST on the commission earned by them as Commission Agents which attracts 18% GST. Only persons buying and selling exempt goods on their own accounts will be exempted from registration requirement.