TaxTMI 
TaxTMI 
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.?
Sales bill with purchase bill
06 Oct 2017 
6 Replies 
3653 Views Asked by
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. (AI Summary)
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. (AI Summary)