GST under RCM: When to pay (Basic level)
By: – CASanjay Kumawat
Goods and Services Tax – GST
Dated:- 24-10-2017
[With reference to deferment of RCM provision given under section 9(4) of CGST Act and section 5(4) of IGST Act]
Generally, the supplier of goods or services is liable to pay GST. However, in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.
There are two type of reverse charge scenarios provided in the GST law:
* First is dependent on the nature of supply and/or nature of supplier, like GTA, legal services from Advocates, insurance agent services to company. This scenario is covered by section 9 (3) of the CGST/ SGST (UTGST) Act and section 5 (3) of the IGST Act.
Second scenario
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* date of payment as per books of account or date of debit in bank account, whichever is earlier; or
* the date immediately following sixty days from the date of issue of invoice or similar other document.
Deferment of applicability of Section 9(4) of the CGST Act, 2017 and Section 5(4) of the IGST Act, 2017
The Central Government vide Notification No. 32/2017-Integrated Tax (Rate)- 13.10.2017 has exempted the inter-State supply of goods or services or both received by a registered person from unregistered supplier from the whole of the IGST leviable thereon under section 5(4) of the IGST Act. It may be noted that the exemption contained in this Notification shall apply to all registered persons till the 31st day of March, 2018. On the similar lines, Notification No. 38/2017-Central Tax (Rate) dated 13.10.2017 has been issued under CGST Act, 2017.
With effect date of the deferment has not been provided in this notification. Accordingly, in view of the various judicial pronounceme
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Act, 2017, time of supply is earliest of: –
* date of payment as per books of account or date of debit in bank account, whichever is earlier; or
* the date immediately following sixty days from the date of issue of invoice or similar other document.
Date of payment is 31st October, 2017 and 60 days from the date of issue of invoice by the supplier is 3rd November, 2017. Therefore, time of supply in this case is 31st October, 2017 (earliest of payment date or 61th day from the date of issue of invoice.)
GSTR-3B of the September has been filed upto 20th October, 2017. Therefore, this discussion may relevant for the period starting from the 1st October, 2017 to 12th October, 2017.
Accordingly, a registered recipient is not required to pay GST under RCM under section 9(4) of the CGST Act, 2017 and section 5(4) of the IGST Act, 2017 in respect of supplies received by him in the said period unless its time of supply is falling on or before 12th October, 2017.
Note: The author can be
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