Section 9(4) Reverse Charge

Last updated at Dec. 16, 2024 by

We know that
Purchase from Unregistered Dealer was covered in Reverse Charge in Section 9(4)
Suppose
A sells goods to B
A is Unregistered and B is Registered
In this case,A does not have GST no so he cant charge GST on Invoice
B will deposit this GST directly to Government and then claim Input of Same
 
Note
When was this Reverse Charge Applicable?
When GST was introduced, this rule was applicable to all business
However exemption was provided for local purchases upto 5000 per day
This Rule  was removed from 13.0ct 2017
 
Rule Reintroduced from 1 Apr 2019
Now, this Rule has again been made applicable but only for builders/promoters in construction business on a Purchase of Cement
Suppose a Builder purchase cement from a shopkeeper and he doesn't charge GST on invoice, Builder has to deposit GST directly to government

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Section 9(4) Expenses Purchase of Goods and Service Purchase from Registered Purchase from Unregistered Normal charge Local + Up to 5000 Local + More than 5000 Interstate Any Amount No Tax No Tax No Tax No Tax Reverse Charge Reverse Charge Till 12 Oct 2017 From 13 Oct 2017 Exception From 1 Apr 2019 Rev Charge again Applicable But Only to Promoters/Builders (No 5000

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.