No liability to pay GST under reverse charge on purchase of goods from unregistered supplier above Rs. 5,000:
Reverse charge mechanism (RCM) is a very common phenomenon in indirect tax and is available from the time of Service Tax. Let’s understand in brief what is RCM under GST law:
RCM basically means that the liability for paying GST for goods or services would be that of service receiver and not the supplier of goods and service.
Notification’s issued for it’s application and removal:
In case of purchase from unregistered purchaser it was proposed vide notification no. 8/2017 Dt. 28.06.2017 that any sale by unregistered supplier to registered person above Rs. 5000 would be paid by the receiver of goods and service which was made applicable from 1st July 2017.
The above notification was then amended and the date of applicability of such reverse charge mechanism was postponed to 31st March 2018 by notification no. 38/2017 Dt. 13.10.2017.
After the above postponement the applicability of such reverse charge was further postponed to 30th June 2018 vide notification no. 10/2018 Dt. 23.03.2018.
Vide notification 12/2018 Dt. 29.06.2018 the date of applicability of such RCM was further extended to 30th September 2018.
In notification number 22/2018 Dt. 06.08.2018 finally it’s applicability was extended by 1 year to 30.09.2019 from 30.09.2018 and therefore finally everyone thought that same would be applicable from 30.09.2019. However on 29.01.2019 vide notification no. 01/2019 notification number 08.2017 has been rescind/ revoked/ cancelled and as of now there is no reverse charge on purchase of goods/ service from unregistered seller above Rs. 5,000.
Let’s have a look at small table to summarize the situation:
| Notification no. | Date | Highlight of notice |
| 08/2017 Central Tax (Rate) | 28.06.2017 | RCM on purchase from unregistered buyer introduced from 01.07.2017 |
| 38/2017 Central Tax (Rate) | 13.10.2017 | Applicability postponed to 31.03.2018 |
| 10/2018 Central Tax (Rate) | 23.03.2018 | Applicability postponed to 30.06.2018 |
| 12/2018 Central Tax (Rate) | 29.06.2018 | Applicability postponed to 30.09.2018 |
| 22/2018 Central Tax (Rate) | 06.08.2018 | Applicability postponed to 30.09.2019 |
| 01/2019 Central Tax (Rate) | 29.01.2019 | Original notification cancelled. |
Looking at the above table it is clear that since original notification which was issued for applicability of such reverse charge has been removed/ cancelled so now there is no reverse charge on purchase of goods from unregistered purchaser.
However it is also pertinent to mention here that between first two notifications i.e. 08/2017 and 38/2017 there was no notification for extension of applicability of this RCM however since the GST was in it’s early phase I don’t think it will create any problem.
Also you can download original notification from below links also:
Notification no. 08/2017: //www.cbic.gov.in/resources//htdocs-cbec/gst/Exemption-from-reverse-charge-upto-Rs5000-per-day-CGST.pdf;jsessionid=C75E8598FB4D557D65FB3579B344BCC3
Notification no. 38/2017: //www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-38-cgst-rate-english.pdf;jsessionid=C293290FE91C9D208A42390492BA5D44
Notification no. 10/2018: //www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-10-2018-cgst-rate-english.pdf;jsessionid=A9DDD3A300BDB37C9DE16BEF33A4F9E5
Notification no. 12/2018: //www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-12-2018-cgst-rate-english.pdf;jsessionid=CBB767494350BF24C44BBE1CBB22E6A6
Notification no. 22/2018: //www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-22-2018-cgst-rate-english.pdf;jsessionid=0E0960D6972E3FCE0B5B819E23F565C5
Notification no. 01/2019: //www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-1-2019-cgst-rate-english.pdf;jsessionid=E6FF5071B6433253FD63D3ACFAAA068F
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