Home / Sales to Unregistered Interstate Dealer

Updated on 21 Jan 2021  9.00 AM IST | 4 min read

Before understanding the concept of “Selling to unregistered interstate dealer”, we must understand who is called “registered” & “unregistered dealer”?

Registered Dealer and Unregistered Dealer

Registered dealer is the one who is registered under GST act and contains unique identification number whereas unregistered dealer is the one who is not registered under GST act and does not contain unique identification number. Registered dealer should comply with all GST laws while making sale & purchase of goods. For ex – In case you are purchasing some stationery items from a dealer who is not registered under GST, you need to pay tax on his behalf.

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What is Interstate sale?

Interstate sale means selling of goods from one state to another. It is mandatory for a dealer to go for GST registration in case he or she wants to sell goods interstate whereas it is not mandatory for the dealer to go for GST registration in case he or she wants to purchase goods interstate.

When you sell your goods to an interstate dealer, the dealer has to bear GST and when you purchase the goods from an unregistered dealer, then you need to pay GST as per reverse cost mechanism and then you can easily claim input tax credit too.

Interstate sale with Unregistered Dealer

An unregistered dealer is a dealer who is not authorized to sell goods interstate as per GST act but there is no such restriction on unregistered dealer in case of purchase of goods.

In case you are selling goods to an unregistered dealer, you can easily claim input tax credit on the goods you sold as you will be charging him GST on the sale. Therefore, it does not matter whether the dealer is registered or not. In case you want to purchase goods from an unregistered dealer, reverse charge mechanism is applicable.

Reverse charge mechanism is applicable when we purchase goods from an unregistered dealer irrespective of any state. Every dealer must be registered under GST act in order to sell goods interstate but it is not mandatory that the dealer to whom you are selling goods should also be a registered one. If you are not a GST registered dealer, you can purchase goods but can’t avail the input tax credit. In case, an unregistered person found selling goods interstate, he or she will be liable for fines or penalties under GST act.

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Due Dates

  • Deadline for filing income-tax returns (ITR) for FY 2019-20 (AY 2020-21)

    Jan 10th ,2021
  • Monthly GSTR 7 (Summary of Tax Deducted at Source (TDS) and deposited) for December 2020

    Jan 10th ,2021
  • Monthly GSTR 8 (Summary of Tax Collected at Source (TCS) and deposited by e-commerce operators) for December 2020

    Jan 10th ,2021
  • Due date for Payment of TDS/ TCS for Oct 20- IT

    Jan 10th ,2021
  • GSTR 1 for December 2020 (turnover more than INR. 1.50 Crore)

    Jan 11th ,2021
  • Monthly GSTR 6 for December 2020

    Jan 13th ,2021