GST LIABILITY OF DISTRIBUTOR AND RETAILER ON RECHARGE/ E TOP SALE

[lalit kumar]

PLEASE ADVICE ON GST TAX LIABILITY ON ETOP OR RECHARGE SALE THROUGH A DISTRIBUTOR AND RETAILER.

REGARDS

LALIT

[KASTURI SETHI]

Dear Querist,

The undermentioned will be helpful:-

For example : A manufacturer supplies the goods to wholesale dealer and wholesale dealer supplies (sells) the goods to retailer and retailer supplies (sells) the goods to the ultimate consumer.A supplier (manufacturer) charges ₹ 120/- (Rs.100/- + Tax ₹ 20/-) from wholesale dealer and wholesale dealer avails the credit of tax of ₹ 20/-and his value addition is ₹ 10/-and he charges + tax @20% on ₹ 110/- i.e. ₹ 22.Thus he charges ₹ 132/- from the retailer. The retailer takes credit of ₹ 22/- and his value addition is ₹ 20/-.He would charge tax @20% on ₹ 130/-(110+20) which works out to ₹ 26/-(GST). Thus final consumer will pay ₹ 136/- Thus tax has been charged at each stage on value addition only which avoids cascading effect i.e. without double taxation.

[DR.MARIAPPAN GOVINDARAJAN]

GST liability is there if you cross the threshold limit of ₹ 20 lakhs.

[Ramesh Kothari]

Tax applicable at every stage till reach to consumer no double taxation

 

AI Summary

GST liability: distributors and retailers remit tax on value addition with input tax credit preventing cascading.
GST on recharge sales via distributors and retailers is imposed at each stage on the seller's value addition while purchasers claim input tax credit for tax already paid, preventing cascading; registration and liability to account for GST arise when the supplier exceeds the statutory turnover threshold.