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CMA Intermediate · Direct and Indirect Taxation · Charge of Tax including Reverse Charge

A company in Singapore supplies online information and database access or retrieval services from a place outside India to Mr Ramesh, an unregistered individual in Pune. Which statement is correct under the CGST Act, 2017?

The Singapore company must be registered. Section 24(xi) makes every person supplying online information and database access or retrieval services from outside India to a non-registered person in India compulsorily registrable, regardless of the section 22 threshold, so neither absence of a place of business nor low turnover exempts it.

  1. AThe Singapore company need not register because it has no place of business in India
  2. BThe Singapore company must be registered, since every person supplying such services from outside India to a person in India other than a registered person is a compulsorily registrable categoryCorrect
  3. COnly Mr Ramesh must register, to pay tax on reverse charge
  4. DThe Singapore company must register only if its turnover crosses the section 22 threshold

Explanation

Section 24(xi) requires registration of every person supplying online information and database access or retrieval services from outside India to a person in India other than a registered person. No threshold applies, because section 24 applies notwithstanding section 22(1). Hence the threshold option is wrong, and the registration duty rests on the supplier.

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