Reversal of ITC on capital goods

If he only providing exempted supply then why is he holding the gst number.

If he is holding GST number he will have to pay GST on any supply.

This person will also have to pay GST on any taxable supply whereas the person who has not taken registration wont pay GST till he doesnt exceed the limit of threshold as mentioned in GST.

You must think before applying for voluntary registration what benefit or disadvantages you will get.

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Thank you.

Hi,

- As the dealer is dealing in supply of exempted supplies and did not availed ITC on the capital goods therefore he is not required to pay GST on the supply of the capital goods.

- The dealer has obtained GST registration though he was not liable to get himself registered, he should show all the supplies in exempted sales column both in GSTR-3B and GSTR-1. He is not required to pay GST on his exempted supplies but as he has obtained GST No. so he is liable to file GST returns timely.

Thanks

Hello,

Yes, you would be required to pay on the transfer of capital goods as this is a taxable event as per Schedule II para 4(a).

Further, for an unregistered person making only exempted supplies, yes he won't be required to pay tax on the transfer of capital goods but he would be subject to certain other restrictions if he is not registered.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Currently GST on RCM basis is not applicable for this case so no need to pay GST on RCM.

No it won't create a problem as you are not claiming credit main problem will be created if you don't pay tax on any output supply.

- No need to pay GST on RCM basis.

- At the time of sale of car also you are not required to pay GST.

- No problem either in GST or Income tax.

Hello,

Firstly there is no RCM on purchase from an unregistered person as of now. So you are not required to charge GST on purchase of capital goods under RCM.

But while you sell this capital good, you might be required to charge GST on it as this could be taxable under Schedule II para 4(a) depending upon the condition of the capital good.

 As of now, there won't be any problem under GST or Income Tax.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Hi,

Hope you are doing well !!

- There is no need to pay GST on RCM basis.

-There will be no problem under GST or Income tax.

Hi

Answer to you Follow up Ques:

No GST to be paid on RCM basis.

It wont create any problem under GST or  Income tax at time of sale also.

Further, you are not liable to pay GST on at the time of sale of car.