Purchase from unregistered dealer who is otherwise required to take GST registration

[Archna Gupta]

Dear Experts,

If we receive consultancy services from unregistered dealer in the same State and we know that he has crossed the basic exemption limit of 20 lacs, in that case should we deposit GST under RCM or we may suffer legal consequences for dealing with such person?

[MUKUND THAKKAR]

The registration is mandatory on crossing the annual turnover limit of ₹ 19,00,000 ( for special category states it is ₹ 9,00,000).

[Vamsi Krishna]

The liability lies with him. Dept will take care of such cases.

Its better to follow rules and pay as RCM and avail credit.

[KASTURI SETHI]

In GST regime, one has to apply for registration as and when liability to pay GST arises. Thus there is no such provision of aggregate turnover of 19 lakhs (or 9 lakhs) as it was available in pre-GST era for small service provider.

Secondly, if any person does not get registration even after crossing threshold exemption limit or otherwise he is required to obtain GST registration, it is not your responsibility as rightly opined by Sh.Vamsi Krishna Ji.

AI Summary

GST registration requirement: supplier bears registration and tax liability, but recipient may pay under reverse charge to claim credit. Registration is mandatory once a supplier crosses the prescribed turnover threshold. The supplier bears the primary liability to register and pay GST. Recipients may, as a precautionary compliance measure, discharge tax under the reverse charge mechanism and avail input tax credit to avoid adverse consequences, although the purchaser is not primarily responsible for the supplier's failure to obtain registration.