jaheer hussain
(577 Points)
Replied 18 January 2019
Puja Sharma
(CA)
(433 Points)
Replied 18 January 2019
RCM - Reverse Charge Mechanism. Under normal circumstances in GST the supplier is liable to pay GST on its supply. However vide section 9(3) and 9(4) of the CGST Act 2017, there has been notified that the recipient of the supply is liable to pay GST.
Section 9(3) of CGST Act states as under:
"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 on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both."
Section 9(4) of CGST Act states as under:
"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 and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both."
In relation to section 9(3), the government has specified the goods and services in respect of which RCM will be applicable vide notification no. 04/2017-Central Tax (Rate),dt. 28-06-2017 and 13/2017-Central Tax (Rate) ,dt. 28-06-2017 respectively.
Further, the provisions of Section 9(4) as mentioned above have been put on hold upto 30.09.2019 vide notf.. no. 22/2018-Central Tax (Rate) ,dt. 06-08-2018.
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