Home / Sales to Unregistered Interstate Dealer

Updated on 20 Sep 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

  • GSTR-7 Summary of Tax Deducted at Source (TDS) and deposited under GST laws

    Sep 10th ,2021
  • GSTR-8 Summary of Tax Collected at Source (TCS) by e-commerce operators under GST laws

    Sep 10th ,2021
  • GSTR 1 for Aug 2021 (turnover more than INR. 1.50 Crore)

    Sep 11th ,2021
  • GSTR-6 Details of Input Tax Credit (ITC) received and distributed by an Input Service Distributor (ISD)

    Sep 13th ,2021
  • GSTR-3B is a summary return to be filed by all taxpayers except those registered under the composition scheme, every month. However, from 1st January 2021, there is also quarterly filing option provided to taxpayers with annual aggregate tunrover of up to Rs.5 crore, opting for the QRMP scheme for Aug Month. (Aggregate turnover exceeding Rs.5 crore in the previous financial year)
     

    Sep 20th ,2021
  • GSTR-3B is a summary return to be filed by all taxpayers except those registered under the composition scheme, every month. However, from 1st January 2021, there is also quarterly filing option provided to taxpayers with annual aggregate tunrover of up to Rs.5 crore, not opting for the QRMP scheme for Aug Month. (Aggregate turnover up to Rs.5 crore in the previous financial year)

    Sep 20th ,2021