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CA Final · Indirect Tax Laws · Charge of GST

Kaveri Logistics, a registered person, receives specified services from an unregistered supplier. The Government has notified a class of registered persons, including Kaveri, to pay tax on such supplies under Section 9(4). How does Section 9(4) operate for this supply?

Kaveri pays the tax on reverse charge basis as the recipient, because Section 9(4) lets the Government notify a class of registered persons liable for specified supplies from unregistered suppliers. The Act then applies to Kaveri as if it were the person liable to pay the tax on that supply.

  1. AKaveri pays tax on reverse charge basis as the recipient, and the Act applies to it as if it were the person liable to pay taxCorrect
  2. BThe unregistered supplier must first register and pay the tax, and Kaveri only claims credit
  3. CTax is payable by the electronic commerce operator through which the services were supplied
  4. DTax is not leviable because the supplier is unregistered

Explanation

Section 9(4) allows the Government to notify a class of registered persons who, for specified goods or services received from an unregistered supplier, pay tax on reverse charge as the recipient. All provisions of the Act apply to the recipient as if it were the person liable to pay tax. Option B is wrong as the liability shifts to the recipient. Option D is wrong because tax is leviable regardless of the supplier's registration status.

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