Date of Exemption from GST Payment on supplies from unregistered persons

In India, the Goods and Services Tax (GST) was implemented on July 1, 2017, to simplify indirect taxation and make it easier for businesses to comply with tax regulations. The GST law requires all registered taxable persons to pay tax on supplies made by them. However, there is an exemption from GST payment on supplies made by unregistered persons up to a certain threshold limit.The exemption from GST payment on supplies made by unregistered persons was introduced to reduce the compliance burden on small businesses and promote ease of doing business. Under this exemption, an unregistered person making supplies of goods or services is not required to pay GST if the total value of such supplies does not exceed Rs. 5,000 in a day. This exemption limit was increased to Rs. 10,000 in a day by the 32nd GST Council meeting held on January 10, 2019.This exemption is available only to unregistered persons and does not apply to supplies made by registered taxable persons. Registered taxable persons are required to pay GST on all supplies made by them, irrespective of the value of such supplies.The exemption from GST payment on supplies made by unregistered persons is subject to certain conditions. The unregistered person making such supplies is required to mention the words “Supply made by an Unregistered Person” on the invoice or any other document accompanying the goods or services being supplied. The recipient of such supplies is required to self-invoice for the supplies received and pay GST on the same under the reverse charge mechanism.It is important to note that the exemption from GST payment on supplies made by unregistered persons is not applicable to goods or services that are covered under the reverse charge mechanism. Under the reverse charge mechanism, the recipient of goods or services is required to pay GST on behalf of the supplier.In conclusion, the exemption from GST payment on supplies made by unregistered persons is a welcome step for small businesses and promotes ease of doing business. However, it is important for businesses to comply with the conditions and follow the necessary procedures to avail this exemption.