GST liability on goods and services on purchases from unregistered dealers / service providers under gst

Reverse charge refers to the liability in order to pay tax by the recipient of the supply of goods or either services or both instead of the supplier of the goods or services or both thus under Section 9 (3) or either Section 9 (4) of the CGST Act, ( Central Goods and Service Tax Act) or either Section 5 (3) or thus Section 5 (4) of the IGST Act ( Integrated Goods and Services Tax Act).

Section 9(4) of the CGST Act however provides for the Central Tax in the respect of the supply of the Taxable goods or Services or either both which is thus by a supplier who is however not registered, to a registered person. The Tax is however paid by the registered person thus as the recipient of the goods and services. Also , all the provisions of the Act shall however apply to such recipient as if he is thus the person who is liable for paying the tax.

Thus , the purpose of this article is to make the reader aware of the GST liability on goods and services on the purchases from unregistered dealers / service providers under GST .

If we thus examine the above provision of the GST Liability in order to pay GST under the reverse charge on the purchases or the services that are however procured from un registered dealers or the service providers, the Liability has thus been shifted from the supplier of the goods or the provider of services thus to the receiver of the goods or either the receiver of the services if he is thus a registered person.

On our further understanding of the provisions, it will thus be clear that it is however the liability of the person who is receiving the goods and services and also utilising them for the business or either for the furtherance of business. All the business organisations whether they are small or big will however have urgencies and also necessity in order to use the services of the small time vendors, service providers, and also the services of a skilled man power who will however be un organised sector and also thus will not have registration under GST.

Also , Every registered person who is however availing the services from a non registered dealer or is either purchasing goods from un registered dealer is thus required to pay the GST under the respective HSN Code which is of the Service / Goods by thus raising an Invoice. It thus means all the registered persons, which are however liable for the GST for un registered services/ goods are thus in order to raise the Invoice on the self and also file returns in order to take Input Tax Credit.

This will thus be considered as an additional activity for the registered dealers who are also liable in order to pay GST under the reverse charge mechanism and are also supposed to know the rate of the GST and thus also the HSN code for each and every category of the service or the goods procured.

Also , the Usual practice of the industry is thus in order to ascertain the service category and the HSN code for the Goods which are produced or the Services which are rendered by that industry for the purpose of billing. But the effect of the reverse charge under the GST will thus make all the Tax Payers in order to know the rate of GST and also the HSN codes for all the purchases and services ( un registered). So thus an expert advice will however be mandatory for all the GST payers. Also , a small size business house/ SME/ distributor who thus has employed an accountant, needs to take the services of an expert.

Also , All most all of the emergency purchases and also the small repair and the plumbing works and the services that are however done by un registered persons. Hence the liability in order to pay GST will however fall on the registered person who thus has availed these services or has either procured the goods. It also thus means that the SMEs/ business organisations are however forced in order to incur an additional tax liability, compliance, ( cash flow) on thus these procurements from which is for an un registered person.

Thus , by this activity it is however the tendency of the business in order to reduce the purchases from the unregistered persons or either to avoid the services from un registered persons.

Also , If the industry/ business houses/ SMEs however stop the services of un registered person, there will thus not be any kind of purchases from the small time vendors, or either utilization of the services from the skilled man power who are thus self employed and also not registered.

GST is thus paid by the recipient under the reverse charge on however some of the purchases or the services from un registered persons, may however thus be available for the Input Tax Credit, but also not on all the goods and the services are however paid under the reverse charge, as there are thus restrictions and conditions for the Input Tax Credit.

Thus , Implementation of GST is however evident and also the industry has a very short time to look for the alternatives or to either change a vendor. It is thus the testing time for all till one however sees a clear path ahead.

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