Purchase of goods and / or services from Unregistered suppliers –
As per Section 9(4) of CGST Act and Section 5(3) of the IGST Act, tax is to be paid on RCM in respect of purchase of goods /services from unregistered persons. Notification No.8/2017 (Central Tax) Rate dt. 28.06.2017 exempted purchase of goods and services from unregistered persons upto a value of `5000/- per day. Further, as per Notification No. 38/2017-Central tax (Rate)dt. 13.10.2017 and
Notification No. 32/2017 Integrated Tax (Rate) dt. 13.10.2017, all categories of registered persons are exempted from these provisions without any monetary limit. This Exemption is in force till 30th June, 2018.
In view of this status, it should be seen what would the status of these provisions after 30th June, 2018.
Checkpoints –
1. Verify that the tax is paid upto 13.10.2017 in all eligible cases where the purchase of goods and services exceed the value of `5000/- per day.
2. Ensure that there is a mechanism ready to address the situation if these provisions are introduced after 30th June, 2018.
3. Verify that invoice is raised for payment of tax under reverse charge.
4. Verify that the Tax is paid by debiting the electronic cash ledger.
5. Verify that the Input Tax Credit is availed after payment of tax in eligible cases.
6. Check the exemptions if any applicable to the service and whether the same is claimed correctly.