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CS Executive · Tax Laws and Practice · Levy and Collection of GST

The Government notifies a class of registered persons who must pay tax on supplies of specified goods received from unregistered suppliers. Under Section 9(4) of the CGST Act, what follows for such a recipient?

Where the Government has notified a class of registered persons and specified goods or services, such a recipient pays the tax on reverse charge basis for supplies from an unregistered supplier. The Act then applies to the recipient as the person liable to pay that tax.

  1. AThe recipient pays tax on reverse charge basis and the Act applies to the recipient as the person liable to pay tax on that supplyCorrect
  2. BThe unregistered supplier must register and pay the tax by himself
  3. CThe recipient pays tax only if the supply is inter-State
  4. DThe recipient is exempt as the supplier is unregistered

Explanation

Section 9(4) lets the Government notify a class of registered persons who pay tax on reverse charge basis on specified supplies received from unregistered suppliers, and the Act applies to them as the person liable to pay tax. The inter-State option is wrong because the Act covers intra-State supplies under CGST, with a parallel provision in IGST Section 5(4).

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