EXAMPLE-121

M/s ABC, trader in Delhi engaged only in the intrastate supply of goods and his turnover not crossed the threshold limit. He has received an order for interstate supply.

Whether he is entitle to make inter-state supply.

1. Specify the registration requirement of M/s ABC ltd.

2. Whether entitled to take credit on input held in the stock.


Answer :
 

1.                    Section 24 of CGST Act requires inter-state supplier to be compulsorily registered under GST.

Thus, if M/s ABC willing to deal in interstate supply is first required to register themselves under GST and then he will be able to make interstate supply and raise invoice and charge Integrated tax from buyer. Buyer will also be able to take credit on integrated tax paid on inward supply after the supplier is regitered taxable person.

As per Notification No. 08/2017-Integrated Tax dt. 14/09/2017,If any person making interstate supply of Handicraft goods and the aggregate value of such supplies does not exceed twenty lakh rupees in a financial year then he is exempt for registration under the act.

So in above case if M/s ABC making interstate supplies of Handicraft goods of value not exceeding Rupees twenty lakh then he shall not be required to register under the act.Further if he wants to claim credit of inputs held in stock then,he has to apply for voluntarily registration under section 25.

2.                  M/s ABC can take voluntarily registration before he deals in interstate supply.

Section 18(1) (b) provides that a person, who takes voluntary registration under section 23(3) shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration.

Thus, he is eligible for credit held in stock immediately on the day immediately preceding the date of grant of registration certificate.