*RCM*
Notification no 01/2019 of Central Tax dated 29.01.2019 issued whereby it has been stated that notification no 8/2017 has been rescinded w.e.f 1st February 2019.
Notification 8/2017 of central tax was issued by which the government has stated that GST is not applicable under RCM where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who are or are not registered, do not exceeds five thousand rupees in a day.
Thereafter, on 13.10.2017 vide Notification No. 38/2017 – Central Tax (Rate) Government has amended notification no 8/2017 and thereby deleted conditions mentioned therein which states that RCM is not application till value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who are or are not registered, do not exceeds five thousand rupees in a day. Therefore, after 13.10.2017 RCM was kept suspended till 31.03.2018.
On 23.10.2018 and thereafter on 29.06.2018 RCM was kept suspended till 30.06.2018 and thereafter till 30.09.2018 vide Notification No. 10/2018 – Central Tax (Rate) and Notification No. 12/2018 – Central Tax (Rate). On 06.08.2018 vide Notification No. 22/2018 – Central Tax (Rate) date was further extended till 30.09.2019.
Now on 29.01.2019 government has withdrawn the exemption given to all supplier from RCM by withdrawing the notification no 08/2017 central tax rate. Due to this withdrawal Section 9(4) of CGST Act 2017 again become operational and hence any supply received from unregistered supplier will attract RCM provision that too without any limit ( that is even if Rs 10 spent RCM is applicable).
The main question before supplier, Is RCM really back ? and if yes will they need to pay GST on all spending that is even without any limit of Rs 5000/-.
To answer, we need to go through Notification no 02/2019 whereby government made amendment in CGST Act 2017 effective from 01.02.2019 and One of the crucial amendment was in section 9(4) which is as under:-
“(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of 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 such supply of goods or services or both.”.
What does it mean, it means the government will notify the class of person on whom section 9(4) that is RCM will be applicable till they notify the person or class of person it will not be made operational.
To summarised above, RCM provision u/s 9(4) of CGST Act become operational from 01.02.2019 as per the notification no 02/2019 but since the government has not notified the class of person on whom RCM will be applicable it will again by operation of law become non operational till government notify class of person on whom section 9(4) will be applicable.
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