Need some clarification on tax revers

[Sivakumar Palanisamy]

Dear sir/madam,

This is sivakumar.i am starting very small business with GST registered. I am going to buy some furniture and computers for my business. I don't have enough knowledge about GST. so could you please explain me that am I allowed to get tax revers whichever I am going to pay to the vendor. Because my business is not yet open but works are under process. If you don't mind can anyone send a chart of the products that we can revers the tax.

Thanks & Regards

Sivakumar

[DR.MARIAPPAN GOVINDARAJAN]

You say you have not yet started. Your annual transactions will not cross ₹ 20 lakhs. So you are exempted from registering under GST. Why did you register? Whether voluntarily? Further I can't understand what you meant for 'tax revers'. Please put your query in clear terms.

[Sivakumar Palanisamy]

First of all thank you very much for taking time to reply for my message Me. Mariappan . I don't understand that how you have assumed that my business will not exceed 20laks. Further more let me make you understand have you ever heard that people register for GST volunteer then why would I apply for it. I have been told to apply for GST by my auditor and the company who is proving franchise to establish the showroom. Moreover I don't understand you are saying that you are not understanding the about the tax reverse but my auditor told me that there is some procedure to reclaim the tax which we paid to third party vendor. Finally I am confused and I did not learn anything from your reply. You are a experience person I hope and you should have asked different way if you are not understanding my message. Anyway once again thank you for your reply.

[DR.MARIAPPAN GOVINDARAJAN]

There are some people registering voluntarily with GST. Your auditor is correct. But your version in this site is confusing. Your auditor says about taking input tax credit. In reverse charge system you have to pay tax on the supply received from the unregistered dealer which is kept abeyance till 31.03.2018. Since your auditor has advised you suitably you may get his further advice on your query.

[Sivakumar Palanisamy]

Thank you very much sir. You are right I should have stick to my auditor advice. Thanks again sir

[Himansu Sekhar]

First of all I am in agreement with the views of Govindarajan sir.

1. If your turnover is more than 20 lakhs- take regn.

2. If less than 20 lakhs you can take regn voluntarily

3. Pay GST on all supplies on the value of the invoices

4. What ever you purchase, you must have paid GST to your supplier

5. On such GST you can take credit which can be utilised for payment of GST

Better take the help of Departmental help desk, or your auditor

Happy Dewali

AI Summary

Input tax credit can be claimed on GST paid to suppliers, while reverse charge makes the recipient liable to pay tax. The inquiry concerns reclaiming GST paid to vendors. The operative explanation distinguishes Input Tax Credit - GST paid on purchases can be taken as credit against output tax - and the Reverse Charge - recipient must pay GST on supplies from unregistered dealers under the reverse charge mechanism. Advisers reiterate that registration is mandatory above the turnover threshold and voluntary below it, and recommend following auditor guidance or departmental helpdesk instructions for procedural implementation.