Purchase of goods/services from unregistered dealer

[RAKESH SHARMA]

Sir

Earlier there was a notification where no RCM is applicable if supplies/services were received from unregistered persons if the aggregate value of supplies does not exceed 5000 during the period from1.7.2017 to 13.10.2017.

What are the rules in this regard after 13.10.2017.

[KASTURI SETHI]

Chronologically status is as under :-

It was deferred up to 31.3.18 vide notification no.38/17-CT(Rate) dated 13.10.17. Thereafter, deferred up to 30.6.18 vide Notification No.10/18-CT(R) dated 23.3.18, deferred up to 30.9.18 vide notification no.12/18-CT(R) dated 29.6.18 and again deferred up to 30.9.19 vide Notification No.22/18-CT(R) dated 29.6.18.

Section 9(4) of CGST Act has been replaced vide S.4 of CGST (Amendment) Act, 2018 w.e.f. 1.2.19.Therefore, notification granting exemption from payment of GST till 30.9.19 cited above is not relevant after 31.1.2019. The above Amendment Act effective from 1.2.19 provides power to Govt. to specify supply of specified categories of goods or services or both received by the specified class of recipients from unregistered supplier, the tax in respect of which will be payable on reverse charge basis by the said recipient.

Further peruse Notification No. 7/2019-C.T. (Rate), dated 29-3-2019 and Notification No. 24/2019-C.T. (Rate), dated 30-9-2019 specifying goods/service and recipients under RCM under Section 9(4) of CGST Act, 2017.

[PAWAN KUMAR]

Nice explain by sir. No rcm in case of unregistered except renting of motor vehicles designed to carry passengers and advocates, gta, director of a company, security service agency.

[KASTURI SETHI]

Dear Pawan Kumar Ji,

Thank you very much.

[varun reddy]

Thank you sir beautifully explained

[Venkataprasad Pasupuleti]

Agree with elaborated reply of Shri. Kasthuri sheth

AI Summary

Reverse charge mechanism applies to specified supplies received from unregistered suppliers, making recipients liable for tax on those services. An amendment to the CGST Act effective from February 2019 authorises the government to specify categories of goods or services and classes of recipients for which tax on supplies received from unregistered suppliers is payable by the recipient under the reverse charge mechanism; government notifications have listed specified supplies and recipients, including certain professional and transport-related services, who are liable to pay tax under reverse charge when procuring from unregistered suppliers.