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CA Final · Indirect Tax Laws · Charge of GST

Kaveri Logistics, a registered transporter, receives a specified category of service for which the Government has notified by notification that tax is payable on reverse charge basis under section 9(3). Which statement is correct about the liability to pay tax on this supply?

The recipient is the person liable to pay the tax. Under section 9(3), for notified categories of supply the tax is paid on reverse charge basis by the recipient, and all provisions of the Act apply to the recipient as though he were the liable person, whether or not the supplier is registered.

  1. AThe recipient is treated as the person liable for paying the tax and all provisions of the Act apply to the recipient accordinglyCorrect
  2. BThe supplier remains liable to pay the tax and the recipient only reimburses it
  3. CThe tax is payable by the Government and not by either party
  4. DThe recipient is liable only if the supplier is unregistered

Explanation

Under section 9(3), for notified categories the tax is paid on reverse charge basis by the recipient, and all provisions of the Act apply to the recipient as if he were the person liable to pay tax. The condition that the supplier be unregistered belongs to section 9(4), which is a different provision for a notified class of registered persons.

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