Reverse Charge Mechanism further postponed till 30.09.2018 for Unregistered Person.

GST & IDT Updates

Section 9 (4) of the Central Goods and Services Tax, 2017 (CGST Act in short) and Section 5(4) of Integrated Goods and Services Tax, 2017 (IGST Act in short) provides that tax in respect of the supply of taxable goods or services or both by a person, 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.

But these provisions kept on hold through various notification issued time to time. Recently these provisions are postponed till 30.09.2018 vide notification dated 29.06.2018. TDS provisions of GST are also postponed till 30.09.2018.

Download CGST notification

Download IGST Notification

Refer below given analysis of applicability of RCM in case of unregistered person:-

Applicability of IGST-RCM on Unregistered person u/s 5(4):-

  1. 1st July, 2017 to 12th October, 2017:- IGST is payable on RCM basis on all interstate supply of goods or services or both, from very first rupee, received by a registered person from an unregistered person from outside state,
  2. 13th October, 2017 upto 30th Sept. 2018:- No IGST is payable on RCM basis on all interstate supply of goods or services or both, received by a registered person from an unregistered person located outside the state.
  3. IGST shall be payable on RCM basis from 1st Oct, 2018 on all interstate supply of goods or services or both, from very first rupee, received by a registered person from an unregistered person from outside state.

Applicability of CGST-RCM on Unregistered person u/s 9(4):-

  1. 1st July, 2017 and upto 12st oct., 2018:- Exemption to all intra-state supply of goods or services or both was granted to the registered person who receives such supply from an unregistered person from payment of CGST on RCM basis subject to thresh hold limit of Rs. 5,000.00 per day in aggregate as provided by way of a proviso to notification 8/2017.
  2. 13th Oct, 2018 and upto 30th Sept, 2018:That the exemption from payment of GST on RCM basis for receipt of intra-state supply of goods or services or both by a registered person from an unregistered person is applicable without any threshold limit w.e.f. 1st July, 2017 and upto 31st March, 2018.(Thershold limit of Rs. 5000/- omitted by notification 38/2017 dated 13.10.2017.
  3. If GST on RCM basis has not be paid by a registered person in compliance of Notification 8/2017 supra, there is no need to deposit the same now.
  4. Registered dealer can claim refund of GST paid on RCM basis upto 12th October, 2017 where the GST paid on RCM was not eligible for ITC
  5. That CGST and SGST shall be payable on RCM basis from 1st Oct., 2018 on all intra-state supplies of goods or services or both,received by a registered person from an unregistered person.

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