Reverse charge in case of procurement from unregistered persons Sec 9(4) of CGST Act 2018



With the approval from the GST council in the meeting held on January 10 2019, the changes made by the CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 along with the corresponding changes in SGST Acts will be applicable from 1sr February 2019.

Keeping in view the implementation of the amendments made in the GST taking place from 1st Feb 2019, it is highly recommended that you must be aware of the changes that have been made in order to understand how they could affect your business.

While some of the amendments provide ease to businessmen, on the other hand, there are some that may be a cause of concern for certain businesses. It is highly recommended to go through some information in order to work accordingly from February 2019 onwards. Here’s an insight into the most important changes that have been made. In order to make it more understandable, we have provided explanations of all the points in a simplified manner.

Changes have been made in relation to various areas including the reverse charge in case of procurement from unregistered persons, eligibility for composition scheme, ITC on motor vehicles, deals involving import and export of goods and services and many more.

From eligibility of registration of e-commerce operators, multiple registrations within the same place, furnishing of returns, recovery of taxes from 2 different persons to the procedure of cancellation of GST registration, a lot has been amended and you must be aware of the new version of the GST that has been rolled out.

Here’s an article that includes the 20 most important amendment which one must read and will clarify all your queries about the changes that have been made in the respective section.

1. Reverse charge in case of procurement from unregistered persons Sec 9(4) of CGST Act 2018

Initially as per section 9(4) of CGST Act 2018, supply of goods or services, from unregistered person to registered person, were covered under reverse charge basis.

Later on vide notification no. 8/2017-Central Tax (Rate) dated 28th June2017 such reverse charge only applicable in case supply of goods and services received from unregistered person is greater than Rs. 5000 per day which again amended by notification no. 38/2017-Central Tax (Rate) dated 13th October 2017, the intra-state supplies of goods or services or both received by a registered person from unregistered person has been postponed from the central tax completely.

The said provision has been extended till 30th September, 2019, vide notification no. 22/2018 – Central Tax (Rate) dated 6th August, 2018.

However, with effect from 1st Feb 2019, Section 9(4) has been completely amended. Now the registered person is liable to pay tax on reverse charge basis only if following two conditions are satisfied –

  • Registered person is covered within the notified class; and
  • Registered person has received specified goods or service from the unregistered person.


With the amendment, the coverage of tax payable under reverse charge basis would be restricted.

It must be noted that the notified class of registered person and the specified categories of goods and services are yet to be notified by the Government and the same would be intimated as and when notified.


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