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GST Help Desk: Seek experts' advise on the new tax reform
An expert answers your questions pertaining to the new tax and its impact. Mail your queries to email@example.com.
If a GST registered person buys from an unregistered supplier, does he escape tax? Shanmugha B Raja, Anna Nagar.
No, the GST registered person will have to pay tax on behalf of the unregistered supplier to the government. This is popularly called as reverse charge. The main idea behind such a clause is to discourage suppliers from not registering as in any case the GST will have to be paid by the recipient of the supply. The aim of such a reverse charge compliance procedure is to expand the tax net, by bringing in the unorganised sector too. Also, the burden of tax compliance shifts from individuals with limited resources to large companies that operate with enough resources. Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier. This compliance may be applicable for services as well as goods.
— D Arvind, Managing Partner, D Arvind & Associates, LLP