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

Which feature distinguishes tax payable by an ECO under section 9(5) from reverse charge tax payable under section 9(3) of the CGST Act, 2017?

Under section 9(5) the ECO pays tax as if it were the supplier for notified services supplied through it, whereas under section 9(3) the recipient pays tax on notified categories of supply. Both provisions work only through Government notification on the Council's recommendation.

  1. ASection 9(5) applies only to goods, while section 9(3) applies only to services
  2. BUnder section 9(5) the ECO is treated as the supplier liable to pay tax on notified services supplied through it, while under section 9(3) the recipient is liable on notified suppliesCorrect
  3. CBoth make the recipient liable, but section 9(5) applies only to inter-State supplies
  4. DSection 9(3) needs no notification, but section 9(5) applies automatically

Explanation

Under section 9(5) the ECO pays tax on notified services supplied through it and is treated as the supplier liable. Under section 9(3) the recipient pays on notified categories of supply and is treated as the person liable. Both depend on notification, and section 9(5) is not limited to goods or to inter-State supplies.

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