A big Relief to Dealers who are not registered under GST regime. Section 9(4) which is said to be a draconian section in GST has created a fuss all over the industry.
As per Section 9(4) of CGST act 2017 any Supply of goods or service from an Unregistered supplier to a Registered supplier will cast liablity to Pay GST to the Government in the form of RCM I.e Reverse charge mechanism.
Moreover, As per Section 12 of CGST Act 2017 , Time of Supply of goods in case of RCM shall be the earliest of :
- Date of Receipt of Goods
- Date of Payment
- 30 days from the date of issue of invoice
- Date of entry in books of account in case the above are not possible to ascertain.
However , As per Section 13 of CGST act 2017 , time of Supply of service in case of RCM shall be earliest of the following :
- Date of Payment
- 60 days from the date of issue of invoice
- Date of entry in books of accounts if the above are not possible to ascertain.
The Service Receiver i.e Registered Person under GST is require to issue taxable invoice on its own i.e Self invoicing under section 31(3)(f) of CGST act 2017.Self invoicing is required in order to avail Input tax credit on the Tax paid to government. As Possession of Invoice is a basic element in order to claim ITC of Tax paid against any supply.
Not only the compliance of raising the invoice (Self invoicing) would increase, working capital would also get block which is the key requirement of Every business.There will not be any cost as such to the Registered dealer because the Tax paid in the current month can be availed in the following month.
It was found to be a negative provision and has created a lot of fuss-
1. Registered dealer would purchase goods or services from registered Dealers instead of Unregistered dealers as the former would be prejudice to there intrest. Less compliance and zero cost.
2. This was also a setback to the URD’s whose turnover limit doesn’t exceed 20 Lakhs thereby not legally required to get registration. In order to run there business they will have to get themselves registered under GST voluntarily otherwise no registered Dealer would dealt with them in any way.
The Government has made its intentions clear and has decided to exempt supplies worth Rs 5000/- per day from any Unregistered dealer which means Supplies above 5000 would require Registered Person to comply with the provisions as specified under GST law. For the supplies above 5000, A monthly consolidated bill can be issued.
Setting an exemption limit in this regard is a welcome move from the government.
Views expressed are personal.
Name of author : Ashish Kumar Madnawat
Author Bio
could you please give clarification for applicable rate of gst i.e. nil rated or zero rated on hotel services which charges are below 1000 per night with reference notification and provision
Sir I have my own cashew mill I have purchased from on un registered person Raw cashew nut is I’m also generated waybilll as like I did not manstion the rcm sir say me one dobut is iam applicable for reverse charges or not I can revised my waybill or ican directly show the revesre charges on my monthly return
Is RCM applicable on indenting commission received from overseas supplier for services provided to customs in India ??
Dear Sir,
Please tell,
I have purchase Rs.8500/- from unregistered person and tax under RCM of RS.85000/- @5%.
WHEN I MAKE RCM INVOICE IN FAVOUR OF CASH OR UNREGISTERED PERSON NAME
I am a Govt. department manufacturing uniforms for Army. Factory have GSTIN. at the time of court cases factory engage Adovcate and paid him fees. So factory should pay GST under RCM for those advocate fees.
Hi
Iam Giving Consultancy to one of the company now they are asking me to give GST invoice, now when I read section 9/4 there is clearly written Goods & Service is both return chargeable for unregistered vendor, please help me its correct or not because they asking me to give HSN code for my servises.
Regards
Deepak
I M tenant in a building. My owner did not register for GST. So I have to pay GST under reverse charge mechansim. So as deferment is now enforced, there is no need for me to pay?
I am the proprietor of my firm and engaged in the business of Dyes & Chemical and also have the GSTIN. Turnover of the firm 3-4 Crore. Now my question is that I am getting a rent of Rs 780000/- per year for my commercial property from a registered dealer of GSTIN. Will I liable to charge GST on this rent or the tenant will pay RCM on this rent.
In our Organaiton , we give advance amount to employees for local purchases and Petty Expenses. will RCM attract on this petty expenses.
These may be reimbuesement but not for his personal travel , food etc, purely petty exp related to our company.
pls reply.
Dear Sir
Our vehicle repair unregistered dealer from inter state , RCM (Inter state aplicabele ?)
If Inter state vehicle repair in invoice SGST +CGST Charged how treat (input credit SGST+CGST from Inter state repair parts)
sir
i am purchased the commodity invoice value the 125000/- but they are the including the transport charges500/- but how to show up the gstr-1
My uncle have rented their property to Muthoot Finance ltd. Muthoot always deduct TDS on rent @ 10% which is shown in 26AS but from 1 July 2017 Muthoot starts deducting GST @ 12% but my uncle annual service is upto only 6,00,000 so my question is
1. How to claim back the deducted GST ?
2. My uncle need to register under GST?
3. Why they are deducting the GST onbehalf of my uncle without any notice?
Hello
I am paying 35000 rent per month as commercial rent ..the owner is URD. If I have to do self invoicing for reverse charge mechanism, how should I charge that. Is it CGST, IGST or SGST.
The tenancy is in Bangalore and the owner is in Mumbai
if a delear registered in GST and exclusively deals in exempted goods (i.e.Food grains,pulses) & pay freight,rent,unloading charges then is RCM applicable.
i am paying rent for my shop. 16000/ per month. am i liable to pay UNDER RCM.
in case of monthly rent paid exceeding 10000 via cheque by registered dealer to an unregistered dealer .Is reverse charge mechanism applicable?
Commission given to unregistered agent RCM applicable???
Hello Sir,
I am a Soyabean/Raw Cotton merchant..& purchased Soyabean/Raw Cotton from farmers through Mandi auction.. Am I liable to pay tax under reverse charge basis (Since farmers are unregistered person)
dear sir, i just want know that which expenses chargeable under RCM(9(4)) for further profit & loss adjustment purpose .
PLEASE SHARE WITH ME LIST OF EXPENSES ..?
Is limit of Rs 5000 for Payment or Invoice. Can i make payment of Rs 4000 daily for 2 days for my purchase from URD of one bill of Rs 8000?
Kindly explain on limit of rs 5000. I mean if i buy goods from two unregistered dealer of rs 4000 each then what should I have to do as per section 9(4)
We are a transport contractor, we used to hire market vehicles from unregistered dealer.
Against our Invoices, consignee/consignor deposit GST on reversal tax.
Point is:- Will we have to deposit GST on services received from unregistered dealer.
Incase, we deposit GST, Against our Invoice, what amount of GST will deposit by our client. (consignee or consignor)
The limit of Rs.5000 is for supply received with any unregistered person or more in a day. It mean if consolidated supply is more than 5000 from two or more suppliers then it will attract RCM even if purchase from one unregistered dealer is less than Rs.5000
the above notification is issued under CGST Act Now question is no notification is issued under SGST Act. . what will happen when we purchase goods from SGST Act.
only need clarification on SGST about Rs.5000/- exemption .
for e.g if we purchase tea , on that gst is 5% so we have to pay only 2.5% to State or 0%
the above notification is issued under CGST Act Now question is no notification is issued under SGST Act. . what will happen when we purchase goods from SGST Act
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
Notification No.8/2017-Central Tax (Rate)
New Delhi, the 28th June, 2017
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the
Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being
satisfied that it is necessary in the public interest so to do, on the recommendations of the
Council, hereby exempts intra-State supplies of goods or services or both received by a
registered person from any supplier, who is not registered, from the whole of the central tax
leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax
Act, 2017 (12 of 2017):
Provided that the said exemption shall not be applicable where the aggregate value of
such supplies of goods or service or both received by a registered person from any or all the
suppliers, who is or are not registered, exceeds five thousand rupees in a day.
2. This notification shall come into force with effect from the 1st day of July, 2017.
hello sir.. i m a grain merchant.. purchase grains from farmers through Mandi auction.. M I liable to pay tax under reverse charge basis( bcoz farmers are unregistered person)
Dear Mr. Ashish,
What is the source of this information
The Government has made its intentions clear and has decided to exempt supplies worth Rs 5000/- per day from any Unregistered dealer which means Supplies above 5000 would require Registered Person to comply with the provisions as specified under GST law. For the supplies above 5000, A monthly consolidated bill can be issued.
I’m a trader of goods. I am taking the delivery of goods from my supplier and Directly sells to my consumer primises. The transporter is paid by me for his cartage and labour of both loading and unloading. For this service the transporter can not generate any invoice on me Or any recipet of cartage paid by me. So for his services I’m liable to pay under RCM or not and how much. If so, how can I get credit on it.
Cenvat on RCM paid on car hire was not available. Is it available on implimentation of GST?
Thanks for the article. Can you please make it clear where we can see the Rs.5000/- threshold communicated by CBEC in their website.
Dear Mr. Ashish,
What is the source of this information
The Government has made its intentions clear and has decided to exempt supplies worth Rs 5000/- per day from any Unregistered dealer which means Supplies above 5000 would require Registered Person to comply with the provisions as specified under GST law. For the supplies above 5000, A monthly consolidated bill can be issued.
does this have any validity with any circular