Non Applicability of RCM U/s 9(4) CGST Act, 2017 Until government Notify a class of registered persons and specified categories of goods or services.

Lots of question are coming that whether RCM is applicable from 01.02.2019 or not.

The answer is that RCM U/s 9(4) of CGST Act is NOT APPLICABLE till Government Notify class of registered persons and specified categories of goods or services which are liable for the RCM Liability.

Even though the notification No. 8/2017-Central Tax (Rate) dated 28.06.2017 has been rescinded through notification no. 01/2019 C.T(R) dated 29th January 2019 w.e.f 01st February 2019, the RCM u/s 9(4) is not applicable based on the following basis:-

Notification no. 2/2019 C.T dated 29th January 2019 notifies the CGST Amendment Act 2018 w.e.f. 01st February 2019 wherein the section 9(4) of CGST Act has been amended as follows:-

In section 9 of the principal Act, for sub-section (4), the following sub-section shall be substituted, namely:––

“(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.”

By reading the section we can understand that the provisions of 9(4) is not applicable to all registered persons, goods and services.

It is applicable only to selected categories of registered persons & Goods and services which has to be notified by the Government. So until the same is being notified the provisions will not get effective.

So at present 9(4) will not get effective from 01st February 2019.

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3 Comments

  1. shashi kant says:

    Sir,
    Please inform that
    1-if a unregistered CA under GST, raise a bill as professional charges or consultancy charges to a company then reverse charge is applicable or not for that company.

    2-If company pay commission to Mkt. team, on sale, then reverse charges is applicable or not for company.

    Thanks

  2. S.Padmanaban says:

    The main aim of introducing GST is to simplify the filing of return even by a layman without seeking the help of auditor/ consultant . But this RCM makes more complication to know which attract RCM & which can be availed as ITC or not.
    Instead of this RCM, there can be one window in the portal asking to give the transaction details of GST not suffered with the PAN number of the supplier& the nature of transaction. from that the can chase the unregistered persons total transaction.

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