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CA Final · Indirect Tax Laws · Charge of GST

Gaurav Enterprises, a registered person, hires goods transport from an unregistered individual. The Government has by notification specified a class of registered persons who must pay tax on reverse charge on specified supplies received from unregistered suppliers. A second scenario: Zenith Online Pvt Ltd, an e-commerce operator based abroad with no physical presence or representative in India, supplies through its platform a notified category of services within a State. Which statement is correct under section 9?

Gaurav is liable under reverse charge only if its class and the supply are notified under section 9(4). For the notified services, the e-commerce operator is liable as if it were the supplier, and a foreign operator without presence must appoint a person in the taxable territory to pay the tax.

  1. AIn both cases the supplier pays tax since reverse charge needs registered suppliers
  2. BGaurav pays only if notified under section 9(4) for that class and supply; for Zenith, tax is paid by the operator, and it must appoint a person in the taxable territory to pay the taxCorrect
  3. CGaurav pays automatically; Zenith is exempt as it has no presence
  4. DZenith's tax is payable by the supplier on the platform in every case

Explanation

Section 9(4) allows notification of a class of registered persons to pay on reverse charge for specified supplies from unregistered suppliers, so liability depends on notification. Under section 9(5), for notified services supplied through an e-commerce operator, the operator pays tax as if it were the supplier. Where the operator has no physical presence or representative, it must appoint a person in the taxable territory who is liable to pay the tax. Exemption for lack of presence is wrong.

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