Category: Reverse Charge

Yes, provisions identical to section 9(3) and 9(4) of the CGST Act are available in section 5(3) and 5(4) of the IGST Act.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 35)

No, it should not  be available to recipient. However as per provisions, supplier who has paid the tax erroneously is free to claim refund.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 33)

No, even if supplier has somehow paid tax, reverse charge liability must be discharged by the recipient. The recipient must not claim credit of tax paid by supplier.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 32)

There is no recourse back to the supplier in case of default by recipient to discharge reverse charge liability.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 31)

Recipient is free to reduce the GST charged from the value of invoice and pay only the net amount but liable to discharge the reverse charge obligation separately.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 30)

There is no provision in section 34 of the CGST Act or Rule 52 of the CGST
Rules, 2017 regarding reversal of tax paid. Equity demands that relief be allowed to the recipient who has paid the tax so that the recipient may apply for refund under section 54 of the CGST Act and not issue credit note or revised invoice for which there is no provision. This relief to claim refund will be subject to credit not being availed by the recipient on the tax so paid.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 29)

Reverse charge is applicable only when there is a supply. Supply ‘agreed to be made’ is regarded as a supply only in case of supply under section 7(1)(a) and 7(1)(c). Even though actual supply is yet to take place, in the case of supplies covered by these two provisions, tax would be payable on award of contract or issue of PO because this itself amounts to supply. However, Table 4 of GSTR-2 requires reference to be made to invoice in respect of supplies liable to reverse charge but Rule 52 does not provide for issuance of invoice earlier than the time of payment. As such the absence of machinery provisions to pay tax at the time of contract / PO, it appears that the liability fails.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 28)

Reverse charge is applicable when there is a supply and the time of supply is
determined by section 12 or 13 of the CGST Act. Reverse charge is applicable at the time of advance even though actual supply is yet to take place. Rule 52 provides for the issuance of a Payment Voucher in cases where tax is to be paid on reverse charge basis

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 27)

No, definition of reverse charge given in section 2(98) refers only to section 9(3) and section 9(4). Tax payment by e commerce operator in case of specified services under section 9(5) would not be a case of reverse charge but a new specie because the e commerce operator facilitates the supply through the digital network and collects payment from recipient and passes it on to supplier.

(ICAI FAQ PUBLICATION 06-09-2017 :Levy and collection of tax- FAQ NO. 26)

It is not necessary for the supplier to take registration since the Notification No. 05/2017- Central Tax dated June 19, 2017, provides for the same. For Example: – In case of an independent director providing services, and his only income is from independent directorship (or such other services covered under RCM) to the company, in this case the director won’t be required to take registration.

(ICAI FAQ PUBLICATION 06-09-2017 REVERSE CHARGE : FAQ NO. 52)