Dear Experts,
Please clarify that if there is no minimum threshold limit on Inter state transactions for registration under GST then why there is a provision in Section 5(4) of IGST Act,2017 for liability under reverse charges on the receiver of taxable goods or services or both on inter state transactions if the same is supplied from unregistered dealer, meaning thereby that the supplier is prohibited to make inter state sale of taxable goods or services or both without registration under GST.
Looking forward to your help.
Best Regards
Archna Gupta
Clarification Needed on Reverse Charge Mechanism Applicability for Interstate Services from Unregistered Dealers Under Section 5(4) IGST Act A discussion on the applicability of reverse charge mechanism (RCM) under the GST framework, specifically for services received from unregistered dealers in interstate transactions. The query highlights a perceived contradiction in the GST Act, where suppliers are restricted from interstate sales without registration, yet Section 5(4) of the IGST Act imposes RCM liability on the receiver. Responses suggest that the government needs to address these inconsistencies, especially for small businesses. Some experts argue that the threshold exemption should remove RCM obligations, while others note the lack of specific exemption notifications for small-scale transactions. The discussion emphasizes the need for government clarification. (AI Summary)
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