PAGE AbouttheAuthorsI-5 PrefacetoSecondEditionI-7 AcknowledgementsI-9 ChapterHeadsI-11 ListofCasesI-21 CHAPTER 1 INTRODUCTION TO GST 1.1 Introduction 1 1.2 Destination Based Tax 1 1.3 Taxes and Duties Subsumed in GST 1 1.4 Exclusion From GST 2 1.5 Taxable Event Under GST 2 1.6 Supply to Return Cycle Under GST 3 CHAPTER 2 CONCEPT OF SUPPLY 2.1 Meaning of the Term ‘Supply’ 4 2.2 Different Types of Supplies Under GST 4 2.3 Levy of GST 9 2.4 Practical Issues 9 2.5 Conclusion 12 ANNEXURE 2A : LIST OF ‘NIL RATED’ SERVICES 13 CHAPTER 3 REVERSE CHARGE 3.1 Introduction 16 3.2 Self-Invoicing Under RCM 17 I-13 CONTENTS
CHAPTER 4
CHAPTER 5
CHAPTER 6 PLACE OF
PAGE 3.3 When Self-Invoice is to be Issued? 17 3.4 Issue of Consolidated Self-Invoice 18 3.5 Conclusion 18 ANNEXURE 3A : LIST OF GOODS & SERVICES UNDER REVERSE CHARGE 19
VALUATION 4.1 Introduction 30 4.2 Meaning of Related Persons 31 4.3 Practical Issues 31 4.4 Inclusions/Exclusions From Transaction Value 34 4.5 Promotional Schemes 36 4.6 Goods Sold Under Warranty 38 4.7 Valuation Rules (Rules 27-35 of the CGST/SGST Rules) 39 4.8 Practical Suggestions 47 4.9 Conclusion 47
CLASSIFICATION OF GOODS & SERVICES AND DETERMINATION OF GST RATE 5.1 Introduction 48 5.2 How to Determine GST Rate? 48 5.3 Classification Principles 49 5.4 Practical Issues 50 ANNEXURE 5A : CLASSIFICATION OF GOODS AS PER CUSTOMS TARIFF ACT, 1975 54 ANNEXURE 5B : SCHEME OF CLASSIFICATION OF SERVICES 57
SUPPLY 6.1 Introduction 58 6.2 Concept of Place of Supply 59 6.3 Determination of Inter/Intra-State Supply 60 CONTENTS I-14
PAGE 6.4 Supplies in Territorial Waters 62 6.5 How to Determine Place of Supply of Goods? 62 6.6 How to Determine Place of Supply of Services? 64 6.7 Place of Supply in Case of OIDAR Services 75 6.7A Place of Supply in Case of for specified Actionable Claims Supplied by a Person Located Outside Taxable Territory (Section 14A) 76 6.8 Practical Issues 76 6.9 Conclusion 79 ANNEXURE 6A : COMPARATIVE ANALYSIS OF SECTIONS 12 AND 13 80 CHAPTER 7 INVOICING, CREDIT & DEBIT NOTES 7.1 Introduction 85 7.2 Practical Issues 85 ANNEXURE 7A : TIME LIMIT FOR ISSUANCE OF TAX INVOICE AND PAYMENT OF TAX 107 CHAPTER 8 TIME OF SUPPLY 8.1 Introduction 110 8.2 Practical Issues 110 CHAPTER 9 INPUT TAX CREDIT 9.1 Introduction 118 9.2 Meaning of Input Tax Credit 120 9.3 Practical Issues 121 9.4 ITC on Supplies For Non-Business Purposes/Exempt Supplies 142 9.5 Claim of Credit by a Banking Company or a Financial Institution Including a NBFC 148 9.6 Blocked Credits 149 9.7 Availability of Credit in Special Circumstances 155 ANNEXURE 9A : SALE OF GOODS UNDER SALE OF GOODS ACT, 1930 160 I-15 CONTENTS
CHAPTER 10
PAYMENT OF TAX
CHAPTER 11
SOP FOR FILING OF RETURNS (GSTR-1 & 3B)
CHAPTER 12
REFUND
PAGE
10.1 Introduction 165 10.2 Electronic Ledgers in GST Portal 165 10.3 Order of Offset of ITC 167 10.4 Restriction on Use of Amount Available in ECL [99% Criteria] 168 10.5 Practical Issues 169
11.1 Introduction 171 11.2 Due Dates 171 11.3 Reporting of Outward Supplies in GSTR-1 and 3B 172 11.4 Reporting of Input Tax Credit (ITC) in GSTR-3B 181 11.5
GSTR-3B 190 11.6
191 11.7 TDS/TCS Credit [Table 6.2 of GSTR-3B] 195 11.8 Interest and Late Fee [Table 5.1 of GSTR-3B] 196 11.9 Payment of Tax [Table 6.1 of GSTR-3B] 196 11.10 Filing of GSTR-4 and CMP-08 by Composition Taxpayer 197
Claim of ITC Under Special Circumstances Which are Reported in Other Forms and Not in Table 4A of
Reversal of ITC Under Special Circumstances Which is Reported in Other Forms and Not in Table 4B of GSTR-3B
12.1 Introduction 199 12.2 Refund Procedure (Application to Disbursement) 200 12.3 Filing of Refund Application for Different Refund Categories 225 ANNEXURE 12A : DOCUMENTS REQUIRED FOR REFUND 313 ANNEXURE 12B : RELEVANT FORMS FOR REFUND 318 ANNEXURE 12C : RELEVANT DATE FOR CLAIMING REFUND 320 ANNEXURE 12D : SUMMARY OF MASTER CIRCULAR NO. 125/44/2019 321 CONTENTS I-16
CHAPTER 13
CHAPTER 14
REGISTRATION
CHAPTER 15
ACCOUNTS AND RECORDS
PAGE
ANNUAL RETURN AND RECONCILIATION STATEMENT 13.1 Introduction 322 13.2 Due Date and Manner of Filing 323 13.3 Who are not Required to File Annual Return and Reconciliation Statement? 323 13.4 Reporting and Payment of Additional Liability 324 13.5 Claim of Additional ITC 324
Late Filing/Non-Filing of GSTR-9/9C 324 13.7 Errors in Filing GSTR-9/9C 325 13.8 Annual Return Filing Time Limit 325
13.6
14.1 Introduction 326 14.2 Practical Issues 327 ANNEXURE 14A : AGGREGATE TURNOVER LIMIT FOR THE PURPOSE OF OBTAINING REGISTRATION AT DIFFERENT POINTS OF TIME 339 ANNEXURE 14B : COMPULSORY REGISTRATION [SECTION 24(1)] 342 ANNEXURE 14C : AMENDMENT OF ADDITIONAL PLACE OF BUSINESS (CORE FIELD) IN THE GST PORTAL 345 ANNEXURE 14D : AMENDMENT OF HSN CODE (NON-CORE FIELD) IN THE GST PORTAL 346
15.1 Introduction 347 15.2 Practical Issues 348 15.3 Conclusion 358 ANNEXURE 15A : ACCOUNTS & RECORDS TO BE MAINTAINED 359 I-17 CONTENTS
CHAPTER 16
Electronic Ledgers (E-Ledgers)
16.5 Why Control Ledgers in Books of Account?
CHAPTER 17
CHAPTER 18
18A : REGISTERED PERSON’S MASTER FILE [ANNEXURE 1 & APPENDIX 7.2A OF GSTAM]
ANNEXURE 18B : DOCUMENTS REQUIRED FOR DESK REVIEW [ANNEXURE III & APPENDIX 7.2B OF GSTAM]
ANNEXURE 18C : RATIO ANALYSIS OF DATABASE [ANNEXURE IV & APPENDIX 7.2C OF GSTAM]
18D : VERIFICATION OF RECORDS/REGISTERS DURING CONDUCT OF AUDIT [ANNEXURE IX & APPENDIX 7.2D OF GSTAM]
ANNEXURE 18E : LIST OF LOCAL RISK PARAMETERS [ANNEXURE XII & APPENDIX 7.2E OF GSTAM]
ANNEXURE 18F : CHECK LIST FOR AUDIT OF TRADERS [ANNEXURE XIII & APPENDIX 7.2F OF GSTAM]
ANNEXURE 18G : CHECK LIST FOR AUDIT OF COMPOSITE DEALERS [ANNEXURE XIV & APPENDIX 7.2G OF GSTAM]
18H : AUDIT FLOW CHART
PAGE
GST ACCOUNTING
16.1 Introduction 363 16.2 Consequences of Incorrect Accounting 364 16.3
364 16.3A Two-Way Accounting System 364
365
366
367
TREATMENT
Practical Suggestions
16.4
16.6 GST Ledgers and Accounting Treatment
FINALIZATION OF ACCOUNTS 17.1 Introduction 376 17.2 SOP for Reporting in Different Areas Under Other Laws 376
SOP BEFORE
AUDIT BY GST
18.1 Introduction 420 18.2 Documents Required for Audit 426 ANNEXURE
427
DEPARTMENT
428
431
437
439
ANNEXURE
441
445 ANNEXURE
448 CONTENTS I-18
CHAPTER 19
ASSESSMENT
CHAPTER 20
MIS REPORTS
CHAPTER 21
TRANSFER OF BUSINESS (DUE TO DEATH OF PROPRIETOR)
CHAPTER 22
DETENTION, SEIZURE & RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
PAGE ANNEXURE 18-I : NEW FORMATS PROVIDED IN MODEL ALL INDIA GST AUDIT MANUAL 2023 WHICH IS PREPARED BY COMMITTEE OF OFFICERS ON GST AUDITS 449
19.1 Scrutiny of returns [Section 61] 468 19.2 Best Judgment Assessment 469
Introduction 472 20.2 Meaning and Purpose of MIS Report 472 20.3 Different Types of MIS Reports (Generated by GSTN) 472 20.4 Practical Suggestions 475
20.1
21.1 Introduction 478 21.2 Two Types of Situations 478 21.3 What Legal heir/Successor need to do first? 479 21.4 Practical Issues 480 21.5 Situation #1: Where business is transferred as a going concern 481 21.6 Situation # 2: Where business is closed? 491
22.1 Introduction 493 22.2 Practical Issues 495 22.3 Conclusion 511 I-19 CONTENTS
CHAPTER 23
OVERVIEW OF GST PORTAL - DASHBOARD
Overview of GST Portal - Dashboard
Annexure 23A : PENALTY UNDER GST LAW
Annexure 23B : SOME DEFENSIVE MEASURES IN CASE OF DEPARTMENTAL PROCEEDINGS
PAGE
512
515
519 CONTENTS I-20
CHAPTER C HAPTER 3
REVERSE CHARGE
3.1 INTRODUCTION
Under GST, tax is normally paid by the supplier. However, in case of certain specified categories of goods and/or services33, as notified by the Government on the recommendation of the GST Council, tax is payable on reverse charge basis by the recipient.
The term “Reverse charge” as defined in section 2(98) of the CGST Act 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 sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act.
Section 9(3) and 9(4) of the CGST Act state that the Government may, on the recommendations of the Council, by notification, specify: categories of supply of goods or services or both - under section 9(3); and a class of registered persons in respect of supply of specified categories of goods or services or both received from an unregistered supplier - under section 349(4)
The tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
33.Section 9(3) of the CGST Act, Section 5(3) of the IGST Act and N. No. 04/2017 for RCM on goods and N. No. 13/2017 for RCM on Services.
34.Substituted vide Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 01-02-2019 before it was read as under :
“(4) The Central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.”
16
Some of the services which are under RCM under section 9(3) are GTA services, Legal services, Sponsorship services, Security services etc. For a detailed list of the goods and services which are under RCM under section 9(3), please refer Annexure A and Annexure B enclosed herewith towards the end of this chapter.
Further, recipient is also liable to pay tax under RCM if he receives specified categories of goods and/or services from unregistered suppliers35. Before 1.2.2019, RCM under this category was applicable in respect of all supplies from unregistered persons. However, with effect from 1.2.2019, only specified class of registered persons has been made liable to pay tax under RCM under this category. The Government has so far notified ‘Promoter’ under this category and the categories of goods and/or services to be procured by them36.
Thus, while first category of RCM shall be applicable irrespective of whether the supplier is registered or not, second category of RCM is applicable only if the supplier is an unregistered person.
3.2 SELF-INVOICING UNDER RCM
Section 31(3)(f) of the CGST Act states that notwithstanding anything contained in sub-sections (1) and (2), a registered person who is liable to pay tax under section 9(3) or 9(4) i.e., under reverse charge shall issue an invoice (i.e., self-invoice) in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both. Thus, the recipient shall issue self-invoice in such cases only if he is liable to pay tax under RCM and when the person from whom he is receiving the goods and/or services is unregistered. If he is not liable as such, then self-invoice is not required to be issued.
Under section 31(3)(g), such a person [i.e., a registered person who is liable to pay tax under RCM] shall issue a payment voucher at the time of making payment to the supplier.
3.3 WHEN SELF-INVOICE IS TO BE ISSUED?
Rule 47 deals with the time limit for issuing tax invoice. It states that the invoice referred to in rule 4637, in the case of the taxable supply of services, shall be issued within a period of 30 days from the date of the supply of service.
35. Section 9(4) of CGST Act and Section 5(4) of IGST Act.
36. N. No. 07/2019-CT (Rate), dated 27.03.2019.
37. The invoice referred to in Rule 46 means tax invoice issued under section 31.
17 WHEN SELF-INVOICE IS TO BE ISSUED Para 3.3
3.4 ISSUE OF CONSOLIDATED SELF-INVOICE
2nd proviso to Rule 46 states that where an invoice is required to be issued under section 31(3)(f), a registered person may issue a consolidated invoice at the end of a month for supplies covered under sub-section (4) of section 9, if the aggregate value of such supplies exceeds rupees five thousand in a day from any or all the suppliers.
3.5 CONCLUSION
In this chapter, we have discussed reverse charge provisions along with the documentary requirements to be complied with in connection therewith. It may happen that though tax has been paid under RCM, self-invoicing was not done or payment voucher was not issued. Proper care should be taken in this regard as during the course of any departmental proceedings, an issue may be raised in this regard and penal provisions may be attracted. Further, the list of RCM goods and services provided in the Annexures to this chapter will help in proper compliance of GST law at the time of filing of GST return.
Para 3.5 REVERSE CHARGE 18
ANNEXURE 3A
LIST OF GOODS & SERVICES UNDER REVERSE CHARGE
3A.1: List of Goods on which tax is payable under Reverse Charge [Section 9(3)]
[Notification No. 04/2017-Central Tax (Rate), dated 28.06.2017]
S. No. Tariff item, sub-heading, heading or Chapter
Description of supply of Goods Supplier of goods
Recipient of supply (1)(2)(3)(4)(5)
1.0801Cashew nuts, not shelled or peeled AgriculturistAny registered person
2.1404 90 10 Bidi wrapper leaves (tendu) AgriculturistAny registered person
3.2401Tobacco leavesAgriculturistAny registered person
38[3A 33012400, 33012510, 33012520, 33012530, 33012540, 33012590
Following essential oils other than those of citrus fruit namely: -
(a) Of peppermint (Mentha piperita);
(b) Of other mints: Spearmint oil (ex-mentha spicata), Water mint-oil (ex-mentha aquatic), Horsemint oil (ex-menthasylvestries), Bergament oil (ex-mentha citrate) Mentha arvensis Any unregistered person Any registered person]
4.5004 to 5006Silk yarnAny person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person
39[4A.5201 Raw cottonAgriculturistAny registered person]
38. Inserted vide N. No. 14/2022-Central Tax (Rate), dated 30-12-2022, w.e.f. 01-10-2023.
39. Inserted vide Notification No. 43/2017, dated 14-11-2017, w.e.f. 15-11-2017.
19
Annex 3A REVERSE CHARGE
S. No. Tariff item, sub-heading, heading or Chapter
Description of supply of Goods
Supplier of goods
Recipient of supply (1)(2)(3)(4)(5)
5.-Supply of lottery. State Government, Union Territory or any local authority
Lottery distributor or selling agent.
Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).
Lotteries (Regulation) Rules, 2010, made under the provisions of sub-section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).
40[6.Any ChapterUsed vehicles, seized and confiscated goods, old and used goods, waste and scrap [Central Government [excluding Ministry of Railways (Indian Railways)], State Government, Union territory or a local authority]40a
Any registered person.]
41[7.Any ChapterPri ority Sector Lending Certificate Any registered person Any registered person]
40. Inserted vide notification No. 36/2017, dated 13-10-2017.
40a. Substituted for “Central Government, State Government, Union territory or a local authority” by Notification No. 19/2023-Central Tax (Rate), dated 19-10-2023, w.e.f. 20-10-2023.
41. Inserted vide Notification No. 11/2018-Central Tax (Rate), dated 28-05-2018.
20
Explanation.—
(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.
2. This notification shall come into force with effect from the 1st day of July, 2017.
3A.2: List of Services on which tax is payable under Reverse Charge [Section 9(3)]
[Notification No. 13/2017-Central Tax (Rate), dated 28.06.2017]
Sl. No. Category of Supply of Services
Supplier of service Recipient of Service
(1)(2)(3)(4)
1 Goods transport agency (GTA) service in respect of transportation of goods by road
[w.e.f. 22.08.2017, RCM not applicable if GTA pays central tax at the rate of 6% under forward charge]42
[w.e.f. 1.1.2019, RCM not applicable if GTA service is provided to:
(
a) a department or Establishment of the Central/State Government/ Union territory; or
(b) local authority; or
(c) Governmental agencies, which has taken registration under the CGST Act only for the purpose of deducting tax under section 51 and not for making a taxable supply of goods or services]43
[w.e.f. 18.07.2022, RCM not applicable if GTA:
(
i) has taken registration under the CGST Act, 2017 and exercised the option to pay tax on the services of GTA in
Goods Transport Agency (GTA)
a. any factory registered under or governed by the Factories Act, 1948; or
b. any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India; or
c. any co-operative society established by or under any law; or
d. any person registered under the GST law; or
e. any body corporate established by or under any law; or
f. any partnership firm whether registered or not under any law including association of persons; or
g. any casual taxable person;
42. Omitted vide Notification No. 05/2022-CT (Rate), dated 13-07-2022.
43. Inserted vide Notification No. 29/2018- Central Tax (Rate), dated 31-12-2018.
21
UNDER
Annex 3A
LIST OF GOODS & SERVICES
REVERSE CHARGE
Annex 3A REVERSE CHARGE 22
Sl. No.
Category of Supply of Services
Supplier of service
Recipient of Service
(1)(2)(3)(4)
relation to transport of goods supplied by him under forward charge; and (ii) has issued a tax invoice to the recipient charging Central Tax at the applicable rates and has made a declaration as prescribed in Annexure III on such invoice issued by him.]43a
2
Legal services directly or indirectly.
Explanation: “Legal service” means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority]
An individual advocate including a senior advocate or firm of advocates.
located in the taxable territory.
Explanation (a) to the Notification: A person located in the taxable territory who pays or is liable to pay freight shall be treated recipient of service.
Any business entity located in the taxable territory.
Explanation ( c ) to the Notification:
The business entity located in the taxable territory who is litigant, applicant or petitioner, as the case may be, shall be treated recipient of service.
However, if service is provided to a business entity with an aggregate turnover upto such amount in the preceding financial year as makes it eligible for exemption from registration under CGST Act, 2017, then such service shall be exempt under Sl. No. 45 Heading 9982 or Heading 9991 of Exemption N. No. 12/2017. 3 Arbitral Services
An arbitral tribunal.
Any business entity located in the taxable territory. 4
Sponsorship services
Any personAny body corporate or partnership firm located in the taxable territory.
43a. Inserted vide Notification No. 5/2022-Central Tax (Rate), dated 13-7-2022, w.e.f. 18-7-2022.
5 Services by CG/SG/UT or Local Authority
However, RCM not applicable in respect of followings:
renting of immovable property; [Please also see Entry No. 5A below]
services by the Department of Posts [by way of speed post, express parcel post, life insurance, and agency services to a person other than CG/ SG/UT or local authority;]43b [and the Ministry of Railways (Indian Railways)]43c
services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
transport of goods or passengers.
445A Services supplied by the CG/SG/ UT/or local authority [excluding the Ministry of Railways (Indian Railways)]43c by way of renting of immovable property to a person registered under the CGST Act [w.e.f. 25.01.2018]
CG/SG/UT or local authority
Any business entity located in the taxable territory.
CG/SG/UT or local authority
Any person registered under the CGST Act
Explanation ( g ) to the Notification:
45(g) “renting of immovable property” means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property.
43b. Omitted by Notification No. 5/2022-Central Tax (Rate), dated 13-7-2022, w.e.f. 18-7-2022.
43c. Inserted by Notification No. 14/2023-Central Tax (Rate), dated 19-10-2023, w.e.f. 20-10-2023.
44. Inserted vide Notification No. 3/2018-Central Tax (Rate), dated 25-01-2018.
45. Inserted vide Notification No. 15/2018-Central Tax (Rate), dated 26-07-2018.
23 LIST OF GOODS & SERVICES UNDER REVERSE CHARGE Annex 3A Sl. No. Category of Supply of Services
of service
of Service (1)(2)(3)(4)
Supplier
Recipient
Annex 3A
Sl. No. Category of
CHARGE
Supplier of service
Recipient of Service
(1)(2)(3)(4)
46[5AA Service by way of renting of residential dwelling to a registered person.
475B Transfer of development rights (TDR) or Floor Space Index (FSI) (including additional FSI) for construction of a project by a promoter [w.e.f. 01.04.2019]
475C Long term lease of land (30 years or more) against consideration in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name) and/or periodic rent for construction of a project by a promoter [w.e.f. 01.04.2019]
6 Director’s services
Any PersonAny registered person]
Any personPromoter
Any personPromoter
A director of a company or a body corporate
7 Insurance servicesAn insurance agent
The company or a body corporate located in the taxable territory.
Any person carrying on insurance business, located in the taxable territory.
48Explanation (f) to the Notification: “Insurance agent” shall have the same meaning as assigned to it in clause (10) of section 2 of the Insurance Act, 1938
8 Recovery services
499 Transfer or permitting the use or enjoyment of a copyright covered under clause (a) of section 13(1) of the Copyright Act, 1957 relating to original dramatic, musical or artistic works
A recovery agent
Music composer, photographer, artist, or the like
A banking company or a financial institution or a NBFC, located in the taxable territory.
Music company, producer or the like, located in the taxable territory.
46. Inserted by Notification No. 5/2022-Central Tax (Rate), dated 13-7-2022, w.e.f. 18-7-2022.
47. Inserted vide Notification No. 05/2019-Central Tax (Rate), dated 29-03-2019.
48. Inserted vide Notification No. 3/2018- Central Tax (Rate) dated 25-01-2018.
49. Upto 30.09.2019, such services by an author to a publisher was also included in this entry. From 1.10.2019, author’s services were put under a separate entry 9A.
24
REVERSE
Supply of Services
Category of Supply of Services
Supplier of service
Recipient of Service
(1)(2)(3)(4)
509A Transfer or permitting the use or enjoyment of a copyright covered under clause (a) of section 13(1) of the Copyright Act, 1957 relating to original literary works [w.e.f. 1.10.2019]
However, RCM not applicable if author is registered under CGST Act and he files a declaration* before jurisdictional commissioner to pay tax under forward charge and shall not withdraw such option in next one year; and makes the prescribed declaration** on the invoice issued to the publisher in Form GST Inv-1.
*Declaration is to be filed on or before 31.10.2019 for the option to be effective from 1.11.2019 or before the commencement of any Financial Year for the option to be effective from the commencement of that Financial Year- As per Annexure-1 of N. No. 22/2019-CT (Rate) dated 30.09.2019.
** I have exercised the option to pay central tax on the service specified against serial No. 9A in column (2) of the Table in the notification No. 13/2017-Central Tax (Rate) dated 28th June, 2017 under forward charge- Annexure II of N. No. 22/2019-CT (Rate) dated 30.09.2019.
Author Publisher located in the taxable territory
5110 Services by the members of Overseeing Committee Members of Overseeing Committee constituted by the Reserve Bank of India
Reserve Bank of India
50. Inserted vide Notification No. 22/2019-Central Tax (Rate), dated 30-09-2019.
51. Inserted vide Notification No. 33/2017-Central Tax (Rate), dated 13-10-2017.
25 LIST OF GOODS & SERVICES UNDER REVERSE CHARGE Annex 3A
Sl. No.
Annex 3A
Sl. No.
CHARGE
Supplier of service
Recipient of Service
(1)(2)(3)(4)
5211 Direct Selling Agents (DSAs) services [w.e.f. 27.07.2018]
Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or LLP
A banking company or a NBFC, located in the taxable territory.
5312. Business facilitator (BF) services [w.e.f. 01.01.2019]
5413. Business correspondent (BC) Services [w.e.f. 01.01.2019]
5514. Security services (by way of supply of security personnel)
[w.e.f. 01.01.2019]
[W.e.f. 1.1.2019, RCM not applicable if such service is provided to: a department or Establishment of the Central/State Govt./Union territory; or local authority; or Governmental agencies, which has taken registration under the CGST Act only for the purpose of deducting tax under section 51 and not for making a taxable supply of goods or services]; or a composition tax payer
Business facilitator (BF)
An agent of business correspondent (BC)
Any person other than a body corporate
A banking company, located in the taxable territory
A business correspondent, located in the taxable territory.
A registered person, located in the taxable territory.
52. Inserted vide Notification No. 15/2018-Central Tax (Rate), dated 26-07-2018.
53. Inserted vide Notification No. 29/2018-Central Tax (Rate), dated 31-12-2018.
54. Inserted vide Notification No. 29/2018-Central Tax (Rate), dated 31-12-2018.
55. Inserted vide Notification No. 29/2018-Central Tax (Rate), dated 31-12-2018.
REVERSE
26
Category of Supply of Services
Category of Supply of Services
15
561.10.2019 to 31.12.2019:
Renting of a motor vehicle
Supplier of service
Any person other than a body corporate, paying central tax at the rate of 2.5% on renting of motor vehicles with ITC only of input service in the same line of business
Recipient of Service
Any body corporate located in the taxable territory
571.1.2020 onwards:
Renting of any passenger motor vehicle where the cost of fuel is included in the consideration charged from the service recipient RCM not applicable if supplier issue an invoice charging central tax at the rate of 6% to the service recipient
5816 Securities lending services under Securities Lending Scheme, 1997 (“Scheme”) of SEBI as amended. [w.e.f. 01.10.2019]
Any person, other than a body corporate
Any body corporate located in the taxable territory
Lender i.e. , a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the Scheme of SEBI
Borrower i.e., a person who borrows the securities under the Scheme through an approved intermediary of SEBI.
Explanation.—For purpose of this notification: ** ** **
56. Inserted vide Notification No. 22/2019-Central Tax (Rate), dated 30-09-2019, w.e.f. 01-10-2019.
57. Substituted vide Notification No. 29/2019-Central Tax (Rate), dated 31-12-2019, w.e.f. 01-01-2020.
58. Inserted vide Notification No. 22/2019-Central Tax (Rate), dated 30-09-2019, w.e.f. 01-10-2019.
27 LIST OF GOODS & SERVICES UNDER REVERSE CHARGE Annex 3A Sl.
No.
(1)(2)(3)(4)
(b) “Body Corporate” has the same meaning as assigned to it in clause (11) of section 2 of the Companies Act, 2013.
(d) The words and expressions used and not defined in this notification but defined in the CGST/IGST/UTGST Act shall have the same meanings as assigned to them in those Acts.
59(e) A “Limited Liability Partnership” formed and registered under the provisions of the Limited Liability Partnership Act, 2008 shall also be considered as a partnership firm or a firm.
60[(h) provisions of this notification, in so far as they apply to the Central Government and State Governments, shall also apply to the Parliament [and State Legislatures, State Legislatures, Courts and Tribunals.]60a
61[(i) The term “apartment” shall have the same meaning as assigned to it in clause (e) under section 2 of the Real Estate (Regulation and Development) Act, 2016.
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j) the term “promoter” shall have the same meaning as assigned to it in clause (zk) under section 2 of the Real Estate (Regulation and Development) Act, 2016.
(k) the term “project” shall mean a Real Estate Project (REP) or a Residential Real Estate Project (RREP);
(l) “the term “Real Estate Project (REP)” shall have the same meaning as assigned to it in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016.
(m) The term “Residential Real Estate Project (RREP)” shall mean a REP in which the carpet area of the commercial apartments is not more than 15% of the total carpet area of all the apartments in the REP.
(n) “floor space index (FSI)” shall mean the ratio of a building’s total floor area (gross floor area) to the size of the piece of land upon which it is built.]
2. This notification shall come into force on the 1st day of July, 2017.
3A.3: List of Goods & Services on which tax is payable under Reverse Charge [Section 9(4)]
[Notification No. 07/2019-Central Tax (Rate) dated 29.03.2019, effective from 1.4.2019]
The government vide above notification has specified ‘Promoter’ as a class of registered persons who shall pay tax under RCM in respect of receipt of following categories of goods and/or services from an unregistered supplier:
59. Inserted vide Notification No. 22/2017, dated 22-8-2017.
60. Inserted vide Notification No. 29/2018-Central Tax (Rate), dated 31-12-2018.
60a. Replaced vide Notification No 2/2023-Central Tax (Rate), dated 28-03-2023, w.e.f. 1-3-2023.
61. Inserted vide Notification No. 05/2019-Central Tax (Rate), dated 29-03-2019, w.e.f. 01-04-2019.
Annex 3A REVERSE CHARGE 28
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1. Supply of all goods and services or both
a. other than services by way of grant of development rights,
b. long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or
c. FSI (including additional FSI) which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of project, in a financial year (or part of the financial year till the date of issuance of completion certificate or first occupation, whichever is earlier) as prescribed in notification No. 11/2017- Central Tax (Rate), dated 28th June, 2017, at items (i), (ia), (ib), (ic) and (id) against serial number 3 as amended.
Note: 5th proviso of Sl. No. 3 of N. No. 11/2017 provides that 80% of the value of input and input services, [other than services by way of grant of development rights, long term lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI (including additional FSI), electricity, high speed diesel, motor spirit, natural gas], used in supplying the service shall be received from registered supplier only.
2. 62[Cement falling in chapter heading 2523 in the first schedule to the Customs Tariff Act, 1975]
3. Capital goods falling under any chapter in the first schedule to the Customs Tariff Act, 1975 supplied to a promoter for construction of a project on which tax is payable or paid at the rate prescribed for items (i), (ia), (ib), (ic) and (id) against serial number 3 in the Table, in Notification No. 11/2017- Central Tax (Rate), dated 28th June, 2017 as amended.
62. Substituted vide Notification No. 24/2019-Central Tax (Rate), dated 30-09-2019, w.e.f. 01-102019 before it was read as under:
“Cement falling in chapter heading 2523 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975) which constitute the shortfall from the minimum value of goods or services or both required to be purchased by a promoter for construction of project, in a financial year (or part of the financial year till the date of issuance of completion certificate or first occupation, whichever is earlier) as prescribed in Notification No. 11/2017- Central Tax (Rate), dated 28th June, 2017, at items (i), (ia), (ib), (ic) and (id) against serial number 3 as amended.”
29 LIST OF GOODS & SERVICES UNDER REVERSE CHARGE Annex 3A
