EXAMPLE-78

   ABC Ltd registered under GST in Haryana purchased goods from Mr. Y also in Haryana for Rs. 200000 who is not registered under GST. Mr. Y is not liable to collect GST on supply made to ABC ltd.

  Determine whether GST is chargeable on this supply. If yes, then who is liable under GST.

  Answer
 

Section 32 of CGST Act prohibits collection of tax in respect of any supply of goods or services or both by the person not registered under GST.

Thus, Mr. Y not eligible for collection of tax.

Section 9(4) of CGST Act specifies that Central tax, State tax, Union Territory tax and Integrated tax in respect of supply of goods or services or both will be paid by the registered recipient on reverse charge if the supplier is not registered under GST. All the provision of this Act shall apply to such recipient as if he is the person liable for paying tax in relation to such supply.

Thus, in the above example ABC Ltd liable to tax (CGST & SGST) according to section 9(4) of CGST Act under reverse charge on Intra state supply of Rs. 2 lakh.

The provisions of section 9(4) i.e 'provisions of reverse charge where goods are supplied by unregistered person to a registered person' are not applicable till  31st day of March 2018 vide Notification No.8/2017-Central Tax(Rate).