Purchase from unregistered person

[Raman Singla]

We buy and pickup scrap from nearby villages/area mostly from unregistered persons.

They accept only cash and maybe they don't provide their Aadhaar UID no.

What is the procedure to purchase from them ???

[KASTURI SETHI]

If you purchase from unregistered dealer, liability of discharging GST will be yours.

[CA.ANCHAL RASTOGI]

you have to pay GST on those purchase if you are registered dealer and it will be adjusted against output GST liability.of yours.

[Raman Singla]

1. Does we have to maintain their (unregistered dealer) identity in any form e.g. Aadhaar UID ??

2. What is the cash purchase limit from unregistered dealer ??

[KASTURI SETHI]

Exemption of sale value of ₹ 5000/- per day is available to unregistered dealer. It does not mean that unregistered dealer should not issue any kind of bill at all. They have no freedom to do every sale on KATCHA BILL. Exemption does not mean license for KATCHA BILL and NON-MAINTENANCE OF RECORDS.

[DR.MARIAPPAN GOVINDARAJAN]

It is not require the identity of the unregistered dealer. But it is advisable to keep the same. As narrated by Shri Sethi the daily limit ₹ 5000/- is entitled for exemption. But if the limit is exceed ₹ 5000/- reverse charge is applicable for the whole amount.

[KASTURI SETHI]

Sh.Mariappan Govindarajan,

Sir, Thank you for stamping my view.

[Kishan Barai]

So if we purchase from URD & pay him via bank & if the amount is below 5000, are we exempted from reverse charge ??

If a buyer of goods is also URD then is he exempted from paying reverse charge even bill cross above 5000 ??

Please elaborate

[Ramesh Kothari]

U can purchased ₹ 5000 from URD it is without tax but purchase cross this amount tax payable by u under reverse charge and can credit of ITC and same may utilized on ur sales

 

AI Summary

Reverse charge obligation applies when buying from unregistered suppliers; buyer must discharge GST and may claim ITC. Purchases from unregistered suppliers require the registered buyer to discharge GST, with the tax payable under reverse charge where a specified daily exemption threshold for unregistered dealers is exceeded; tax so paid may be claimed as input tax credit against the buyer's output liability. Maintaining identity details, bills or receipts and proper records is advisable to substantiate purchases and ITC claims; informal cash transactions without documentation are discouraged.