By | July 13, 2017

Can a trader or manufacturer do the business without registering under GST?

Yes, a small businessmen can do the business in his state without registering under GST subject to condition that his gross turnover is below Rs 20 Lakhs.

Few More Queries & Solution related to unregistered dealers under GST

What do we mean by Aggregate (Gross )Turnover under GST for basic exemption limit of Rs 20 Lakhs?

Gross Turnover under GST means total turnover of the business including exempted turnover & services,  Gross turnover all included total sales done by that person (PAN) in India during the year. As per section 2(6) of CGST Act, “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

Can unregistered dealer buy from registered dealer

Yes, any unregistered dealer can buy from registered dealer under GST but one should always ask for GST paid invoice and invoice should contain GSTIN Number of seller from whom unregistered person in buying the goods or services.

Can unregistered dealer buy from unregistered dealer

Yes, unregistered dealer can buy from another unregistered dealer, there is no restriction on such transaction but one should be always ask for invoice as it will proof of purchase of goods and payment should be made in cheque even though its not compulsory.

Can unregistered dealer do interstate purchase?

Yes, unregistered dealer can buy from another state dealer subject to condition that seller should be registered under GST.

Can unregistered dealer do interstate sale i.e. sale to another person in another state?

No,unregistered dealer are not authorized do interstate sale under GST, if want to do interstate sell then they have to register themself under GST.

What will happen when unregistered dealers provide goods and services to GST registered dealer

Unregistered dealer can sale the goods and services to registered dealer but reverse charge provision will be applicable on GST registered dealer, even though government has given the exemption of Rs 5000/- per day from reverse charge. So conclusion of notification is that every registered dealer can buy goods and services from unregistered person subject to the total limit of Rs 5000/- per day, post which registered dealer has to pay reverse charge on total purchases from unregistered persons for that day.

Can unregistered person provide services to others?

Yes, unregistered person can provide the any services to registered or unregistered dealer, subject to the provisions of reverse charge given under section 9(3) & 9(4) of CGST/SGST Act. Limit of Rs 20 lakhs is applicable on services but this limit of Rs 20 lakhs is total turnover which means total receipt inclusive of receipt from sell of goods (including exempted goods)

Can unregistered dealer do E-commerce business?

No, unregistered dealer are not authorised to do E-commerce business under GST, if any person wants to do E-commerce business he has registered under GST Act. Section 2(44) defines “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network;

Can unregistered dealer required to pay GST under Reverse Charge under section 9(3) and 9(4) of SGST/CGST Act

Yes, under section 9(3) unregistered company has to pay GST under Reverse Charge and No for Section 9(4)i.e. no payment of GST when good purchase from unregistered dealer. Rate at which RCM (Reverse Charge) is payable

Section 9(3) of CGST/SGST Act (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Read Supplied covered under Reverse Charge under GST

Section 9(4) (4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such
recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Do unregistered person is required to maintain any specific books of accounts?

No specific books of accounts are required to be maintained by unregistered dealer, but he has to maintain invoice/bill books which can give details about the total sell made by him during the year.

Do unregistered person has to pay GST ?

No GST is payable by URD, subject to the provision of reverse charge under section 9(3) of CGST/SGST act.

Do unregistered person has to file any return under GST

No, Unregistered dealers are not required to file any return under GST Act.

What will happen to unregistered dealer, when turnover exceeds exemption limit of Rs 20 lakhs?

Apply for new registration under GST act. While filling application for new registration under GST dealer has the option to select the whether he wants to go under composition scheme or do business under regular GST provisions. How to apply for new registration under GST

What will happen to Stock in Hand (Closing Stock) when unregistered person registered under GST?

In that case if URD has bought the goods from registered dealer can get the input credit for such tax paid by him to registered dealer and stock purchased from other unregistered dealer he has to GST on that and no input credit will be available on that.

For Any Query related to GST post your query in comment section given at the end of post.

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