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

Sunrise Traders Pvt Ltd, a registered person, receives specified goods from an unregistered supplier. Under Section 9(4) of the CGST Act, 2017, who can be made liable to pay tax on this supply on reverse charge basis?

Under Section 9(4), the Government, on the Council's recommendation, notifies a class of registered persons who must pay tax on reverse charge for specified goods or services received from an unregistered supplier. It is not automatic for all registered recipients or all purchases.

  1. AAny unregistered supplier, by Council resolution alone
  2. BA class of registered persons specified by Government notification on the Council's recommendation, as recipient of specified goods or services from an unregistered supplierCorrect
  3. CEvery registered person automatically for all purchases from unregistered suppliers
  4. DOnly an electronic commerce operator

Explanation

Section 9(4) empowers the Government, on the Council's recommendation, to notify a class of registered persons who pay tax on reverse charge for specified categories of supplies received from unregistered suppliers. It is not automatic for all purchases, so the third option is wrong.

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