Reverse Charge

[ROHIT GOEL]

Whether reverse Charge u/s 9(3) is made applicable w.e.f. 1-10-2019 or it is kept pending by some notification?

[KASTURI SETHI]

Section 9(4) of CGST Act was deferred till 30.9.19 vide Notification No.22/18-CT(Rate) dated 6.8.18. Now Section 9(4) stands amended (substituted) w.e.f. 1.2.19 by S .4 of the CGST (Amendment) Act, 2018 (31 of 2018). So the general provision of RCM levy on supplies from unregistered persons has been replaced with authorizing the Govt. to notify class of registered persons who shall only pay GST under RCM in respect of supply of specified categories of goods or services or both received from an unregistered supplier.

Example

By virtue of above amendment of Section 9(4), Cement falling in chapter heading 2523 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975). has brought under RCM vide Notification No.24/19-CT(R) dated 30.9.19.

After amendment, Section 9(4) regarding purchases from unregistered dealer stands no more deferred now..

[Ganeshan Kalyani]

The RCM u/s 9(3) is in force since from the beginning I.e. 01.07.2017.

AI Summary

Reverse Charge Mechanism under GST: Section 9(3) applicable since July 2017; Cement added from October 2019. A query was raised regarding the applicability of reverse charge mechanism (RCM) under Section 9(3) of the GST Act from October 1, 2019. One response clarified that Section 9(4) of the CGST Act was deferred until September 30, 2019, but was amended effective February 1, 2019, allowing the government to specify registered persons required to pay GST under RCM for certain goods or services from unregistered suppliers. Another response confirmed that RCM under Section 9(3) has been in effect since July 1, 2017. Cement was specifically mentioned as being subject to RCM from October 1, 2019.