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2019 (4) TMI 454 - AAR - GSTReverse Charge u/s 9(4) prior to 13.10.2017 - receipt of supply of goods and / or services from an unregistered person from an unregistered person - N/N. 8/2017 dated 28.06.2017 read with N/N. 38/2017 dated 13-10-2017 - section 9(4) of the CGST Act SGST Act - recovery of tax under section 9(4) of CGST Act - interest on the delayed payment of CGST / SGST under section 9 (4) of the Act - Effect of taxation of circular dated 2nd May 2018 including interest on the transaction dated 31st August 2017. Held that - The applicant has received the tenancy rights from an unregistered person. The agreement was made between the parties on 31.08.2017. The transaction amount is ₹ 54.00 lakhs. The Transfer of tenancy rights in goods or of undivided share in goods without the transfer of titles thereof is treated as supply of services under clause (b) of para I of schedule II of CGST Act 2017. There is no difficulty in arriving at the conclusion that there is nothing to show that the amendment notification No.38/2017 would have retrospective effect and therefore we find that the provisions of RCM u/s.9(4) of the CGST Act are applicable, irrespective of any threshold limit, right from 01.07.2017. Thus the benefit of exemption from payment of tax on RCM as provided u/s. 9(4) of the GST Act is not applicable from 01.07.2017 as claimed by the applicant - thus, the RCM is applicable on the transactions effected from 1.7.2017 to 12.10.2017. The issues, interest on the delayed payment of CGST / SGST and effect of taxation of circular dated 2nd May 2018, are not answered since the question has been withdrawn by the applicant.
Issues Involved:
1. Applicability of exemption from GST on reverse charge basis under section 9(4) of the CGST Act for supplies from unregistered persons. 2. Action for recovery of tax under section 9(4) of the CGST Act for the period from 01-07-2017 to 12-10-2017. 3. Applicability of interest on delayed payment of CGST/SGST under section 9(4) of the CGST Act. 4. Effect of the circular dated 2nd May 2018 on taxation and interest for transactions dated 31st August 2017. Issue-wise Detailed Analysis: 1. Applicability of Exemption from GST on Reverse Charge Basis: The applicant sought clarification on whether the exemption from GST on reverse charge basis under section 9(4) of the CGST Act is applicable irrespective of any threshold limit from 01-07-2017, as per Notification No. 8/2017 dated 28-06-2017 read with Notification 38/2017 dated 13-10-2017. The applicant argued that the omission of the proviso in Notification No. 38/2017 should be considered effective from the date of the original notification (28-06-2017), thus implying no GST on reverse charge basis for supplies from unregistered persons from 01-07-2017. The Authority, however, concluded that the amendment does not have retrospective effect. Therefore, the reverse charge mechanism (RCM) is applicable from 01-07-2017 to 12-10-2017, and the benefit of exemption is not applicable from 01-07-2017 as claimed by the applicant. 2. Action for Recovery of Tax: The applicant questioned whether any action for recovery of tax under section 9(4) of the CGST Act can be initiated if such tax is not paid for the period from 01-07-2017 to 12-10-2017 within the respective due dates. The jurisdictional officer contended that recovery can be initiated as per the provisions of the Act. However, this question was withdrawn by the applicant and was not answered by the Authority. 3. Applicability of Interest on Delayed Payment: The applicant inquired whether interest on delayed payment of CGST/SGST under section 9(4) of the Act is applicable when such tax on the relevant transactions has been kept on hold till 30-09-2019 by virtue of Notification No. 22/2018 - Central Tax (Rate) dated 06-08-2018. The jurisdictional officer contended that interest on delayed payment is applicable as per the provisions of the Act. This question was also withdrawn by the applicant and was not answered by the Authority. 4. Effect of Circular Dated 2nd May 2018: The applicant asked whether the circular dated 2nd May 2018 would have any effect on taxation, including interest on the transaction dated 31st August 2017. The jurisdictional officer contended that the transaction dated 31-08-2017 for ?54,00,000/- is taxable under GST Law as per the circular. This question was withdrawn by the applicant and was not answered by the Authority. Conclusion: The Authority concluded that the exemption from GST on reverse charge basis under section 9(4) of the CGST Act is not applicable from 01-07-2017. The reverse charge mechanism is applicable for the period from 01-07-2017 to 12-10-2017. The other questions were withdrawn by the applicant and were not addressed by the Authority.
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