Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee
(iv) Mandatory Registration under section 9(3) for Reverse Charge purpose need not trigger
the provisions of section 9(4)
Section 9(3) of the CGST Act, 2017 provides that the Government may, on the recommendations
of the Council, by notification, specify categories of supply of goods or services or both, the tax
on which shall be paid by the recipient on reverse charge basis.
Further section 9(4) of the CGST Act, 2017 provides that the central tax in respect of the supply
of taxable goods or services or both by a supplier, who is not registered, to a registered person
shall be paid by such person on reverse charge basis as the recipient.
Issue
There may arise a situation wherein an assessee has obtained registration under GST for availing
certain services on which tax is liable to be paid under Reverse Charge as per section 9(3) but the
outward supplies made by such an assessee is exempt under GST in case of Education Institution,
Hospital etc..
When an assessee is dealing in wholly exempted goods having turnover more than Rs.20 lakhs he
is not required to take registration by section 23 of CGST Act, 2017. However, Section 24
mandates to obtain registration in case the liability arises under reverse charge. This situation
requires clarity as provisions of section 24 overrides the provisions of section 22(1) only and not
section 23.
Suggestion
It is therefore suggested that there be provided a suitable clarification that in cases where
registration is taken only for the purpose of section 9(3) i.e. payment of tax under reverse charge
the provisions of section 9(4) will not be triggered.
Read Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee
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