Sales bill with purchase bill

[Pawan Chaudhari]

Hello,I have small scrap shop,I purchase scrap from house hold like old paper, iron steel etc.and give them money in cash So I don't have any bill of purchase and when I sale this goods after accumulation in bulk to other dealers for which I give them GST bill and they pay me amount including GST via cheque which I have to withdra cash from . So my query is how do I show the purchase.? I also have to transport accumulated goods to the dealer. Or any suggestions how will GST work with this business model.?

[Pawan Chaudhari]

It's sales bill without purchase bill

[KASTURI SETHI]

In such a situation, practically, purchase bill is not possible. So in the absence of purchase bill, you cannot avail ITC. So loss is to you. But you will have to deposit GST into Govt. as you have collected the same from your buyers. You will have to work out value of purchase by going backwards i.e. from sale price minus GST. By depositing GST into Govt. Accounts, your outward liability is over. Regarding purchase entry has to be made in ledger though you may not have purchase bills. Value addition has to be taken care of.

[Ravikumar muthusamy]

you can raise payment voucher and consider it as purchase bill for accounting and other purposes

[Himansu Sekhar]

Purchases from urd persons will attract gst if per day purchase ismorethan five thousand. You can have an invoice once in a month and pay gst on reverse charge and take ITC.

[Chhatra Jain]

As you are purchasing from URD it for you to pay raise bill of supply if it is more than 5000/ per day and pay GST in reverse charge. Once you pay you pay GST in reverse charge it will be your ITC and same can be adjusted against your output liability. Alternatively if purchase is less than 5000/ you can raise GST in Sales Invoice and pay GST. So in this way you can discharge your GST liability. In case of transportation of goods to dealer if freight is less than 1500/ no need to pay GST. If it is more than that recipient is to pay GST on Freight iin reverse charge.

But GST Council in its meeting has deferred RCM till 31 st March 2018 so let us wait for notification and reply to this query may be modifies accordingly.

[KASTURI SETHI]

The whole scenario has changed. Our books purchased after implementation of GST have become almost outdated within three months in view of wholesale changes after 1.7.17. GST has become a mess. Question mark on software of GST. Question mark on the efficiency of Govt. All show Govt. Is itself confused because of too many frequent changes desperately.

AI Summary

Reverse charge GST obligations and Input Tax Credit limits shape tax compliance for cash purchases without purchase invoices. Absent purchase invoices, scrap dealers cannot claim Input Tax Credit; collected GST must be remitted and purchase ledger entries maintained. Purchases from unregistered persons may trigger the reverse charge obligation, and payments under reverse charge can be taken as ITC to offset output tax. Payment vouchers may be used for accounting where invoices are not available, and transport charges require separate assessment for reverse charge applicability.