Reverse charge mechanism
Query (Issue) Started By: – Vishal mandaviya Dated:- 23-3-2018 Last Reply Date:- 26-3-2018 Goods and Services Tax – GST
Got 4 Replies
GST
Reverse charge
\nLets start with an example of person doing trading of cotton.
\nFor example Mr. A is cotton trader. He has GST number.
\nLets say this is July 2017 and Mr. A purchase some amount of cotton from farmers (i e. Unregistered dealer). He buys a cotton worth of ₹ 1 Crore and sale it.
\nNow for GST he will need to pay 5 lakh for sales and 5 lakh as a reverse charge. So he pays total 10lakh of GST into which 5 lakh will be saved as an ITC.
\nNow the next month i.e. August.
\nThis time Mr. A purchase cotton worth of 20lakhs and sell it.
\nNow this time he will pay 1<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n der tax bracket and thereby increase in revenue to the govt. however this provision has been suspended upto 30th June 2018 as decided in the gst council meeting held on 10.03.2018. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Reverse charge mechanism Query (Issue) Started By: – Vishal mandaviya Dated:- 23-3-2018 Last Reply Date:- 26-3-2018 Goods and Services Tax – GSTGot 4 RepliesGSTReverse charge Lets start with an example of person doing trading of cotton. For example Mr. A is cotton trader. He has GST number. Lets say this is July 2017 and Mr. … Continue reading “Reverse charge mechanism”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11088","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11088"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11088\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nfirst you pay 5lacs of reverse charge on say 17th of next month and let it get reflected in gst credit ledger of gstn. then while making payment of 5 lacs on sales then you will be claim set of the tax paid under reverse . by this way your money will not be blocked. the said method is within law as the provision states that credit can be taken in the same month.
\nReply By Vishal mandaviya:
\nThe Reply:
\nDear Sir,
\nThanks for your kind reply.
\nI have ITC of ₹ 8lakhs right now. Now how can I claim it back?
\nReply By gstwithtmi tmi:
\nThe Reply:
\nThe tax you ar<\/p>\n
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