Kriti Advisory Logo: India Entry Services
 

Services
India Entry Services
Corporate Advisory Services
Corporate Law Services
Due Diligence Services
Service Tax Services
RBI / FEMA Services
Registered Office Services
IT/SEZ/EOU Approvals & Compliances
STPI/SEZ/EOU
Customs
Service Tax Services
DOT Licensing
Corporate Finance & Strategy
Corporate Finance
Corporate Strategy & Restructuring
News & Views
  
Download
Brochure

Blog
Articles


News Detail

CHALLENGES OF BUYING FROM UNREGISTERED SELLERS

Saturday, April 15

While we analyse the impact of GST, few sections appears to be impractical and challenging for the business world. Section 9(4) of GST Bill talks about a purchase made by a registered entity from an unregistered entity. Eg. A Company (registered entity) purchasing a pen from a stationary shop (unregistered entity). The section says in such situations the buyer (registered entity) shall bear the burden of GST on such sale under what is termed as “Reverse Charge Mechanism”. This mechanism will impact the working capital. Also, the registered entities (the buyer) will have to ascertain the GST rate for each & every product it buys from unregistered party and then pay tax on it. Another challenge which crops up is under section 31 (3)(f), which requires the buyer to issue invoice for purchase made by him from unregistered seller. The same has to be uploaded in the GST portal & creating an invoice has its own complex set of requirements, one being HSN classification. Such challenges may hit the business of small players in the market!

BACK