CMA Intermediate · Direct and Indirect Taxation · Charge of Tax including Reverse Charge
Which statement about section 9(4) of the CGST Act, 2017 is correct as per the text of the Act?
Section 9(4) applies to a notified class of registered persons for specified categories of goods or services received from an unregistered supplier. The recipient pays tax on reverse charge, but only for notified classes and categories, not every purchase from unregistered suppliers by every registered person.
- AIt applies to every registered person on all purchases from unregistered suppliers
- BIt applies only to purchases from registered suppliers of notified goods
- CIt applies to a notified class of registered persons for specified categories of goods or services received from an unregistered supplierCorrect
- DIt makes the unregistered supplier liable to pay tax on reverse charge
Explanation
Section 9(4) empowers the Government to notify a class of registered persons who, for specified categories of goods or services received from an unregistered supplier, pay tax on reverse charge as recipient. It is therefore restricted by class of recipient and by category, and the recipient, not the supplier, pays.
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