Can a composition dealer buy goods from unregistered dealer within state if yes then RCM applicable in year 2019-20 on composition dealer.

Reply— Yes a composition dealer can purchase goods from unregistered dealer, there is no restriction as such. Composition dealer can not sell goods out of state but he can purchase goods from other states also.

Provision of section 9(4) of CGST Act, i.e. reverse charge mechanism in case of purchases made from unregistered person (amount more than Rs. 5000/-) was operative upto 12.10.2017. As per notification No. 38/2017 CT (Rate) dated 13-10-2017, all supplies from unregistered person are exempted without any threshold limit.  The subsequent Notifications no. 22/2018-Central Tax (Rate) dated 06-08-2018 has extended the exemption from tax liable under the reverse charge basis under section 9(4) till 30-09 2019. This notification has been rescinded by CBIC. And as per CGST (Amendment ) Act, 2018, provision of section 9(4) has been amended and now Reverse charge is not applicable on all inward supplies received from unregistered supplier.