Reverse charge under Section 9( 4 ): Under Section 9( 4 ), it has been supplied that all materials received by a registered individual from unregistered persons will be accountable to reverse charge and the recipient will be responsible to pay tax in such cases.
Notification no. 8/2017- Central Tax dated 28 th June 2017 provides that intra state products received by an unregistered individual from registered taxpayers will be excused based on the amount of Rs. 5000 each day w.e.f. 01.072017 This indicates that only when the aggregate worth of taxable materials goes beyond Rs. 5000 in a day from unregistered individuals, tax will be payable under reverse charge system. If such supplies are below Rs. 5,000 in a day, they will be thought about as exempted. This exemption was not suitable in case of inter-State products. This means that on invoice of inter-State materials from unregistered dealerships, no threshold limitation will apply. This indicates that total amount of IGST arising on invoice of inter-state supplies ought to be payable on reverse charge basis. This arrangement had its validity just upto 12 th October 2017.
On 13 th October 2017, the Government released Notification no. 38/2017- Central Tax (Rate) and 32/2017- Integrated Tax (Rate). As per the said notices, any intra/ inter State materials received by a signed up person from unregistered persons will be exempted irrespective of the aggregate worth in a day. The limit of Rs. 5,000 has actually been withdrawn from 13 th October2017 However, this does not modify the position till 12 th October 2017 and the said limit of Rs. 5,000 will continue to apply till this date. According to the suggestions of the GST Council, this suspension of the provisions of reverse charge in case of inward supply from unregistered individual will stand only upto 31 st March2018 All supplies after 13 th October 2018 should be revealed as excused products.
Vide Notification no. 10/2018- Central tax (Rate) and Notification no. 11/2018- Integrated Tax (Rate) dated 23 rd March 2018, reverse charge under Section 9( 4) has been postponed till 30 th June2018 This suggests that all such supplies will be treated as exempt in nature till 30 th June 2018.
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