EXAMPLE-122

PQR in Delhi engaged in manufacturing and dealing in intrastate supply of goods. He is not registered under GST as his turnover not crossing the threshold limit (20 lakh). He is receiving an order for manufacturing goods from a person located in another state on 25th September, 2017. Manufacturing of product requires some time and supply of goods will be made on 24th October, 2017.

1.                  How the manufacturer deals with the registration requirement.

2.                 He obtains registration by filing application on 1st October and registration certificate is issued on 8th October, 17.  Whether he can deal in inter-state supply and on which stock PQR is eligible to take credit of input tax held in stock.

Answer.

1.                  Section 24 of CGST Act require inter-state supplier to be compulsorily register under GST irrespective of the fact that he is within threshold limit.

 M/s PQR can take registration under GST if he wants to make interstate supply. Only after getting registered under GST, he will be able to make interstate supply and can raise invoice and charge integrated tax from buyer. Then Buyer will be able to take credit on integrated tax paid on inward supply.

 

2.                  PQR obtained registration on 8^th October, thus he can deal in interstate on or after 8th October, 2017 and can issue tax invoice and can claim ITC on GST paid by him on stock of inputs held on 7th October, 2017 in view of provisions contained under Section 18(1)(b).