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CA Final · Indirect Tax Laws · Charge of GST

Kaveri Logistics Pvt Ltd, a registered person, receives goods transport services from an unregistered sole proprietor. The Government has, on the Council's recommendation, notified a class of registered persons who must pay tax on specified services received from unregistered suppliers. Kaveri falls in that class and the service is a specified category. Who is liable to pay the tax and under which mechanism of section 9?

Kaveri Logistics, as the recipient, must pay the tax on reverse charge under section 9(4). The Government has notified its class of registered persons for specified supplies from unregistered suppliers, so all Act provisions apply to Kaveri as if it were the person liable to pay the tax.

  1. AThe unregistered supplier, under forward charge in section 9(1)
  2. BKaveri Logistics, as recipient, on reverse charge under section 9(4)Correct
  3. CThe Government, since the supplier is unregistered
  4. DKaveri Logistics, but only if the supplier later registers

Explanation

Section 9(4) lets the Government notify a class of registered persons who pay tax on reverse charge on specified supplies received from an unregistered supplier. All provisions then apply to the recipient as if the recipient were the person liable. The option on forward charge is wrong because the supplier is unregistered and the notification shifts liability to the recipient.

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