The most discussed topic under GST is probably the reverse charge mechanism. In particular, Section 9(4) which reads as follows:


(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.


In essence, any registered person getting supplies from an unregistered person would need to pay the tax applicable on the good or service on reverse charge.


In order to provide some relief, the Government issued a Notification providing some relief for supplies aggregating below Rs 5000/- per day. The Notification is reproduced below;-


Notification No.8/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017):

Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.


  1. This notification shall come into force with effect from the 1st day of July, 2017.




The Notification provides an exemption for supplies of goods and services from unregistered suppliers aggregating less than Rs 5000/- per day. One of the first questions that arises is whether an entity needs to monitor this every day. In many entities supplies from unregistered vendors may not be made every day. Some supplies could be on a continuous basis  (supply of coffee/tea by unregistered vendors). Monitoring this every day could be an extremely cumbersome task. This leads one to the next question- can we aggregate this Rs 5000/- per day and pay tax on reverse charge only if supplies from unregistered dealers exceed Rs 150,000 per month ( 5000*30).


The answer would appear to be Yes considering the spirit of the Notification.


Would it matter if in this aggregation of Rs 150,000/- supplies from one unregistered vendor exceeds Rs 5000/- on one particular day?

In the opinion of the author, it should not matter being an one-off transaction. However, it is advisable for the Notification to be amended by providing some Illustrative Examples as to how this limit is to be calculated.

As too many things are happening on GST at the same time, everyone is finding it difficult to absorb the heaps of information being cast upon them at regular intervals. To add to the confusion, the CBEC has commenced the activity of issuing Notifications. One can expect a flood of Notifications soon.


One of the biggest disappointments is that the CBEC has not thought of simplyfing the Notifications. Every Notification has the following :


  1. In exercise of the powers conferred by…….
  2. on being satisfied that it is necessary in the public interest so to do,
  3. intra-State supplies of goods or services



Notification No.9/2017-Central Tax (Rate)


In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a deductor under section 51 of the said Act, from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the said Act, subject to the condition that the deductor is not liable to be registered otherwise than under sub-clause (vi) of section 24 of the said Act.


Main Section Impacted

Section 51 of the CGST Act states that the Government may mandate,–

(a ) a department or establishment of the Central Government or State



(b ) local authority;


(c ) Governmental agencies;


(d ) such persons or category of persons as may be notified by the Government

on the recommendations of the Council


to deduct tax at the rate of 1% on some supplies.




This Notification states that tax deduction is not required for all intra-state supplies provided the deductor is liable to be registered only because of the TDS Clause. No limit has been prescribed.


One can expect many more such Notifications in the years to come. Notifying times lie ahead!


As per the latest decision of the GST Council, GST will be introduced in India from July 1st. It is going to be launched on 30th June 2017 midnight. This, despite the fact that taxpayers have no idea how the portal would work save for some screen-shots which ask more questions that they answer. The GST Council has made an announcement that the GSTR 1 form, with invoice-wise details, which has to be filed by the 10th of the month following the assessing month has to be filed by September 5 and for August by September 20. A new form GSTR 3B will need to be filed by August 20 for July and September 20 for August. The reason given by the GST Council for the extension of these time limits are to give relief to businesses- the actual reason could be that the software is not yet ready.



The question that will come to every tax payer is “ What should we do?”. Here’s a brief laundry list.


  • Your Provisional GST Registration Number will be your GST number. Actual registration certificates under GST will come later.
  • From July 1, start charging GST as per the applicable tax rate on all outward supplies.
  • Maintain an Outward Supplies Ledger and Inward Supplies Ledger.
  • File the Form 3B by August 20 for July and September 20 for July and August respectively.
  • Pay tax on the net amount of tax payable
  • Obtain the data necessary to fill in the GST Transitional Return.
  • File the GST Transition return by 31ST It would be a good idea to file this only in the month of August as this gives some time to match invoices.
  • Keep looking for exemption notification- the department is famous for giving a Spate of Notification the moment a new law is introduced.
  • Find out your jurisdictional Assessing Officer ( its always better to know them
  • Make a list of all vendors/suppliers who are registered/ not registered.
  • Train your Finance Department n the intricacies of GST.
  • Hope for the best.



There is enough literature on the pluses and minuses of GST- this article doesn’t want to add to the literature. Instead, it shall focus on bidding adieu to the Central Excise Act, Finance Act 1994 and VAT Acts of State Governments. Though these Acts will continue to be used for goods and services that have not been subsumed under GST (petroleum products) and for the existing cases pending, they will no longer be used on a day to day basis from July 1st.


Central Excise Act

The Central Excise Act is the oldest of the lot-it has lived for 73 years. When introduced, it was called the Central Excise and Salt Act. It introduced us to the concept of manufacture and got us used to an extremely detailed Tariff list that seemed very particular on taxing different types of the same product differently- this is something that the GST Act has picked up effortlessly. We were told that manufacture means a new product coming into existence and that Excise Duty gets attracted the moment the goods leave the factory gate.  Credits were permitted through what was called Modified Value Added Tax (MODVAT) which later rechristened itself to Cenvat Credit. It also decided to introduce the concept of valuation of manufactured goods. Each one of these areas was disputed all the way till the Supreme Court and litigation on some areas will continue well into the GST era.


Service tax

Service tax was unleashed upon the nation in 1994. It has had a tumultuous 23 years. This is probably one of the few laws in the country that does not have an Act against its name even after two decades. When it was introduced, a service was not defined and a threshold exemption limit was not given. Having not defined a service, the tax department had to face litigation from mandap keepers and retailers.  A threshold exemption limit in 1994 would have ensured that the exemption limit under GST would have been at least Rs 40 lakhs- a figure close to what the Arvind Subramaniam Committee recommended.


VAT Acts

For a long time since Independence, State Governments had their own Sales Tax Acts. Haryana took the lead in introducing VAT in 2003- over the years all other States followed suit. VAT introduced us to the concept of transfer of title and later some Governments introduced e-way bills. VAT also gave us one of the most controversial areas of taxation- taxing works contracts. It began in 1959 when the Supreme Court in State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd., 1959 SCR 379 held that in a building contract which was one and entirely indivisible, there was no sale of goods and it was not within the competence of the State Provincial Legislature to impose a tax on the supply of materials used in such a contract, treating it as a sale. Decades later, the Supreme Court would reiterate the decision in Kone Elevators. GST has fixed the problem of Works Contracts by classifying it as a supply of services.

Each of the above Acts has served their purpose in some manner or the other and taxpayers will certainly miss them. However, since the GST law has modeled itself on these laws to a large extent, we may not miss most of the issues that they engaged the taxpayer, department and courts with.


While many existing indirect tax payers have got provisional GST numbers, there are a few who haven’t. Well, asks them not to worry. Because, the tax department says:-


Your present registration position under GST What action should you take?
If you are a Taxpayer having received Acknowledgement Reference No You should be able to download the Provisional Registration Certificate from “Download Certificates” at GST website from 27th June 2017.
If you are a Taxpayer, who has saved the enrolment form with all details but has not submitted the same with DSC, E-Sign or EVC You will receive the ARN at your registered email ID, if the data given are successfully validated after 27th June 2017.In case of validation failure (data like PAN not matching), you should be able to login at the same portal from 27th June 2017 onwards and correct the errors. You can refer the registered email for details of the errors.
 If you are a Taxpayer, who has partially completed the enrolment form You can login at the portal on the above mentioned date and complete the rest of the form
If you are not an existing Taxpayer and wish to register newly under GST You would be able to apply for new registration at the GST portal from 25th June 2017. also states that enrolment window will reopen on 25th June 2017 and continue for 3 months as per Rule. We are not sure what Rule this is but should take comfort in the fact that the enrolment window is going to be open for three months. Another terse clarification from the portal is

“Also note that your provisional ID will be your GST Identification Number (GSTIN)”

The above clarifications force us to seek more clarifications. A few are listed below:


  1. If my provisional ID is my GSTIN, will I ever get a GST REG-03 and GST REG-06?
  2. Assume that I register on 10th August 2017 though I am supposed to register prior to the appointed day, what happens? Should I file my returns for June and July? Will I be penalized for late registration?
  3. Can we assume that there will be no window open for registration three months after 25th June 2017? What if I cross the magic number of Rs 20 lakhs on 20th December 2017?
  4. I have registered but my vendor has not been able to register because he is a small trader and has had difficulties in registering. Is there a way out for me to avoid paying tax on reverse charge?
  5. More clarity is needed on registering as a casual taxable person? Would anyone who carries on business in another State apart from the one in which he is registered need to register as a CTP?
  6. What is the process of correcting errors in my Registration Certificate?


It is apparent that there are no definite answers to any of these questions right now. We can expect some Notifications and Clarifications soon. Keep watching this space for all the latest!