Purchases from unregistered person by composition Dealer : Pay GST

By | July 20, 2017
(Last Updated On: July 20, 2017)

Question : How would a manufacturer under the  composition scheme who receives inputs or input services from an unregistered person pay GST ? What will be the tax rate if the purchase is from a person availing composition ?

Answer: GST will have to be paid on inputs and input services received by such manufacturer under reverse charge at normal rates and not at the composition rates.

Purchase from a person under the composition scheme is purchase from a registered person and hence will not attract tax under reverse charge under section 9(4) of the CGST Act, 2017.

Any person migrating from the existing law to a composition scheme and holding stock of goods purchased from unregistered persons is required to pay tax on such goods.

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