GST collection/charge have two types: 

Forward Charge: Supplier supplies goods/services or both to recipient, and Recipient make payment along with GST amount to Supplier. The Supplier is liable to pay GST amount to Government, which is collected from Recipient. Section 9(1) and section 9 (2) covers the Forward charge.

Reverse Charge: Supplier supplies goods/services or both to recipient, and Recipient make payment without GST amount to Supplier. The Recipient is liable to directly pay the GST amount to Government. Section 9(3) and section 9 (4) covers the Forward charge.

As Per Section 9

(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.

(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.

(3) The Government may, on the recommendations of the Council, by notification, specify the 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.

(4) 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.

(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.

(5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:

Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

Explanation

Sec 9(1)

CGST apply on all intra-State supplies (With in state supplies) of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section15 and at such rates, not 20% (i.e. highest rate of tax is 40%, 20% CGST+20% SGST/UGST)

Note: alcoholic liquor for human consumption is outside the purview of CGST Act.

Sec 9(2)

CGST apply on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.

Note: petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel are inside the purview CGST Act but not taxable yet.

Sec 9(3)

Following Goods and services notified by the Government on which reverse charge is applicable:-

S. No. Category of Supply of Goods Supplier
of Goods
Recipient of Goods
1 Cashew nuts, not shelled or peeled (HSN 0801) Agriculturist Any registered person
2 Bidi wrapper leaves (tendu) (HSN 1404 90 10) Agriculturist Any registered person
3 Tobacco leaves (HSN 2401) Agriculturist Any registered person
4 Silk Yarn HSN 5004 to 5006 Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person
4A Raw Cotton HSN 5201 Agriculturist Any registered person
5 Supply of lottery State Government, Union Territory or any local authority Lottery distributor or selling agent.

Explanation. – For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of sub-section (1) of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

6 Used vehicles; seized and confiscated goods, old and used goods, waste and scrap HSN Any Chapter Central Government, State Government, Union Territory or any local authority Any registered person
7 Priority Sector Lending Certificate HSN Any Chapter Any registered person Any registered person

 

S. No Category of Supply of Services Supplier
of service
Recipient of Service
1 Supply of Services by a goods transport agency (GTA) who has not paid central tax at the rate of 6%, in respect of transportation of goods by road to-

(a)   any factory registered under or governed by the Factories Act, 1948(63 of 1948);or

(b)   any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or

(c)    any co-operative society established by or under any law; or

(d)   any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State
Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or

(e)   any body corporate established, by or under any law; or

(f)    any partnership firm whether registered or not under any law including association of persons; or

(g)   any casual taxable person

Provided that nothing contained in this entry shall apply to services provided by a goods transport agency, by way of transport of goods in a goods carriage by road, to, –

(a)    a Department or Establishment of the Central Government or State Govt. or Union territory; or

(b)    local authority; or

(c)    Governmental agencies, which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 and not for making a taxable supply of goods or services.

Goods Transport Agency (GTA) (a)   Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or

(b)   any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or

(c)   any co-operative society
established by or under any law; or

(d)   any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or

(e)   any body corporate established, by or under any law; or

(f)    any partnership firm whether registered or not under any law including association of persons; or

(g)   any casual taxable person; located in the taxable territory.

2 Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to a business entity. An individual advocate including a senior advocate or firm of advocates. Any business entity located in the taxable territory.
3 Services supplied by an arbitral tribunal to a business entity An arbitral tribunal Any business entity located in the taxable territory
4 Services provided by way of
sponsorship to any body corporate or partnership firm
Any person Any body corporate or partnership firm located in the taxable territory
5 Services supplied by the Central Government, State Government, Union territory or local authority to
a business entity excluding, –(1) renting of immovable property, and(2) services specified below-(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority;(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii) transport of goods or passengers.

Central/State
Government, Union territory or local authority
Any business entity located in the taxable territory
5A Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a person registered under the Central Goods and Services Tax Act, 2017 (12 of 2017). Central/State
Government, Union territory or local authority
Any person registered under the Central Goods and Services Tax Act, 2017.”
“5B Services supplied by any person by way of transfer of development rights or Floor Space Index (FSI) (including additional FSI) for construction of a project by a promoter Any person Promoter
5C Long term lease of land (30 years or more) by any person against consideration in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name) and/or periodic rent for construction of a project by a promoter Any person Promoter
6 Services supplied by a director of a company or a body corporate to the said company or the body corporate A director of a company or a body corporate The company or a body corporate located in the taxable territory
7 Services supplied by an insurance agent to any person carrying on insurance business. An insurance agent Any person carrying on insurance business, located in the taxable territory
8 Services supplied by a recovery agent to a banking company or a financial institution or a non banking
financial company
A recovery agent A banking company or a financial institution or a non-banking financial company, located in the taxable territory
9 Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like.

w.e.f. 01.10.2019

Supply of services by a music composer, photographer, artist or the like by way of transfer or permitting the use
or enjoyment of a copyright covered under clause (a) of
sub-section (1) of section 13 of the Copyright Act, 1957
relating to original dramatic, musical or artistic works to a
music company, producer or the like

Author or music composer,
photograp her, artist, or the like
Music composer,
photographer, artist, or the like
Publisher, music company, producer or the like, located in the taxable territory

Music company,
producer or the like,
located in the taxable
territory. ”;

9A

w.e.f. 01.10.2019
Supply of services by an author by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957
relating to original literary works to a publisher.

Author

Publisher located in the taxable territory.

Provided that nothing contained in this entry shall apply where-

(i) the author has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017), and filed a declaration, within the time limit prescribed with the jurisdictional CGST or SGST commissioner, as the case may be, that he exercises the option to pay central tax on the service specified in column (2), under forward charge in accordance with Section 9 (1) of the Central Goods and Service Tax Act, 2017 under forward charge, and to comply with all the provisions of Central Goods and Service Tax Act, 2017 (12 of 2017) as they apply to a person liable for paying the tax in relation to the supply of any goods or services or both and that he shall not withdraw the said option within a period of 1 year from the date of exercising such option;-

(ii) the author makes a declaration, as prescribed on the invoice issued by him in Form GST Inv-I to the publisher. ”;

10

Supply of services by the members of Overseeing Committee to Reserve Bank of India

Members of Overseeing
Committee constituted by
the Reserve Bank of India

Reserve Bank of India.

Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs). 

Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm.

A banking company or a non-banking financial company, located in the taxable territory

Services provided by business facilitator (BF) to a banking company

Business facilitator (BF)

A banking company,
located in the taxable territory

Services provided by an agent of business correspondent (BC) to business correspondent (BC).

An agent of business
correspondent (BC)

A business correspondent, located in the taxable territory

Security services (services provided by way of supply of security personnel) provided to a registered person:

Provided that nothing contained in this entry shall apply to, –

(i) (a) a Department or Establishment of the Central Govt. or State Government or Union territory; or

   (b) local authority; or

   (c) Governmental agencies;

which has taken registration under the Central Goods and Services Tax Act, 2017 only for the purpose of deducting tax under section 51 of the Act and not for making a taxable supply of goods or services; or

(ii) a registered  person paying tax under section 10 of the said Act.

Any person other than a body corporate

A registered person,
located in the taxable territory

w.e.f. 01.10.2019
Services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient, provided to a body corporate.

See Clarification issued

Any person, other than a body corporate who supplies the service to a body corporate and does not issue an invoice charging central tax at the rate of 6 per cent. to the service recipient

Any body corporate located in the taxable territory.

w.e.f. 01.10.2019
Services of lending of securities under Securities Lending Scheme, 1997 (“Scheme”) of Securities and Exchange Board of India (“SEBI”), as amended.

Lender i.e. a person
who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the Scheme of SEBI

Borrower i.e. a person who borrows the securities under the Scheme through an approved
intermediary of

Sec 9(4)

Earlier in this Section CGST 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.

Note: An exemption was provided for payment of tax under RCM up to an aggregate value of such supplies of goods or services or both received by a registered person from any or all the unregistered suppliers, where such value did not exceeded Rs. 5000/- in a day. Moreover, the exemption was provided in respect of any payment of tax liability by registered person on supplies made by an unregistered person by time to time through different notifications.

However, finally the above exemption was rescinded, and the provision was substituted by the Central Amendment Act, 2018.

“Specified Categories of Goods and/or Services and specified class of registered persons as notified by the Government under section 9(4) on which tax shall be paid by recipient of such goods or services or both, in case of supply by unregistered supplier”

Following Goods and services notified by the Government on which reverse charge is applicable: 

S. No. Category of Supply of Goods/Services Recipient of Goods/Service
1 Supply of such goods and services or both [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI)] which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of project, in a financial year (or part of the financial year till the date of issuance of completion certificate or first

occupation, whichever is earlier) as prescribed in notification No. 11/ 2017- Central Tax (Rate), dated 28th June, 2017, at items (i), (ia), (ib), (ic) and (id) against serial number 3 in the Table, published in Gazette of India vide G.S.R. No. 690, dated 28th June, 2017, as amended.

Promoter
2 Cement falling in Chapter Heading 2523 in the First Schedule to the Customs Tariff Act,1975 (51 of 1975) Promoter
3 Capital goods falling under any Chapter in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) supplied to a promoter for construction of a project on which tax is payable or paid at the rate prescribed for items (i), (ia), (ib), (ic) and (id) against serial number 3 in the Table, in notification No. 11/ 2017- Central Tax (Rate), dated 28th June, 2017, published in Gazette of India vide G.S.R. No.690, dated 28th June, 2017, as amended. Promoter

Sec 9(5)

In this section the government may notify the Goods /Services or both in which e_commerce operator will be liable to pay GST instead of supplier of goods. Like: OYO, Swiggy, Zomato, UBER, OLA.
At present Government notified following three Services:

S. No. Category of Supply of Services Supplier of service Person Liable to Pay GST
1 Transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle.

Notification No. 17/2017-Central Tax (Rate) dt 28th June, 2017  and Notification No. 14/2017-Integrated Tax (Rate) dt 28th June, 2017

Any person E-commerce operator
Providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes.

Notification No. 17/2017-Central Tax (Rate) dt 28th June, 2017  and Notification No. 14/2017-Integrated Tax (Rate) dt 28th June, 2017

Any person except who is liable for registration under sub- section (1) of section 22 of the said CGST Act E-commerce operator
3 Services by way of house- keeping, such as plumbing, carpentering etc.

Notification No. 23/2017-Central Tax(Rate) dated 22nd Aug, 2017

and Notification No. 23/2017-Integrated Tax (Rate) dated 22nd Aug, 2017

Any person except who is liable for registration under sub- section (1) of section 22 of the said CGST Act E-commerce operator

(Author can be reached at pawansharmaca@gmail.com)

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