ॐ असतो मा सद्गमय
As regards the recipient who pays tax on reverse charge basis, tax so paid would be available as credit subject to section 17. As regards the supplier whose tax is paid by the recipient, value of such supply will be treated as ‘exempt supply’ while applying section 17(2) of the CGST Act, 2017 on all the credits availed.
(ICAI FAQ PUBLICATION 06-09-2017 REVERSE CHARGE : FAQ NO.24)
Yes, if the contract provides that the price charged does not include tax.
(ICAI FAQ PUBLICATION REVERSE CHARGE : FAQ NO.23)
Contractually if tax is not included in the price payable towards the supply, then tax payable on reverse charge basis cannot be reduced from the value of supply that is paid to the supplier. And if included, then due effect to this understanding must flow by making the deduction from the payment.
(ICAI FAQ PUBLICATION 06-09-2017 REVERSE CHARGE: FAQ NO. 22)
Yes, as long as the tax is on the subject of levy, Government is free to collect this tax from any person – either the supplier or the recipient or anyone else. Even a third party can be called upon to deposit the tax provided there is some nexus such as collection of payment for the supply between two other persons.
(ICAI FAQ PUBLICATION 06-09-2017 REVERSE CHARGE: FAQ NO. 21)
In terms of Section 7 of the IGST Act, 2017, import of goods or services or both shall be treated to be a supply in the course of inter-state trade or commerce. Accordingly, tax under the provisions of IGST Act shall apply on import of goods or services or both.
(ICAI FAQ PUBLICATION 06-09-2017 LEVY AND COLLECTION: FAQ NO. 20)
No, section 9(1) which is the charging provision for levy and collection of tax on intra State supplies excludes supply of alcoholic liquor for human consumption. Further, in terms of Section 9(2), tax on supply of petroleum crude, high speed diesel, motor spirit, natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. Accordingly, supply of alcoholic liquor for human consumption is not liable to tax under the CGST Act,2017.
(ICAI FAQ PUBLICATION 06-09-2017 LEVY AND COLLECTION: FAQ NO. 19)
As per Section 9 of the CGST Act, 2017 there are two types of supplies which are liable to tax under reverse charge mechanism: –
1. As per sub-section 3 specified categories of supply of goods or services or both as notified by Government on recommendations of the Council.
2. As per sub-section 4 Supply of taxable goods or services or both by an unregistered supplier to a registered person. However, the supplies made by unregistered suppliers to a registered person are exempted, if the aggregate value of such supplies does not exceed 5,000/- in a day.
(ICAI FAQ PUBLICATION 06-09-2017 LEVY AND COLLECTION: FAQ NO. 18)
In terms of Section 2(98), the term reverse charge means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under section 9(3) or (4) of the CGST Act, 2017 or under section 5 (3) or (4) of the IGST Act, 2017.
(ICAI FAQ Publication 6-9-17 LEVY AND COLLECTION: FAQ NO. 17:)
Generally, the person effecting taxable supplies is liable to pay taxes. However, following are certain exceptions:
(a) Reverse charge: On supply of goods as specified under Notification 04/2017- Central Tax (Rate), dated 28.06.2017 and on supply of services as specified under Notification 13/2017- Central Tax (Rate), dated 28.06.2017 or such other goods or services, as may be notified by the Government on the
recommendations of the Council, the tax shall be paid by the recipient under reverse charge; and
(b) E-Commerce: Categories of services as specified under Notification 17/2017- Central Tax (Rate), dated 28.06.2017 or such other services as may be notified by the Government on the recommendations of the Council the tax shall be paid by the electronic commerce operator if such services are supplied through it.
(ICAI FAQ PUBLICATION 06-09-2017 LEVY AND COLLECTION: FAQ NO. 16)
Government has notified different rates of taxes for different category of goods and services. For instance, Notification 01/2017- Central Tax (Rate), dated 28.06.2017 prescribes the rate of central tax for supply of goods and Notification 11/2017- Central Tax (Rate), dated 28.06.2017 prescribes the rate of central tax for supply of services. Further, the provision specifies that the Central/State Government may specify rate of tax not exceeding 20%.
(ICAI FAQ PUBLICATION 06-09-2017 LEVY AND COLLECTION: FAQ NO. 15)