9(4) Applicability, Goods and Services Tax - GST

[Kunal Agrawal]

The limit of 5000 per day given under NOTIFICATION NO. 8/2017-CENTRAL TAX (RATE), DATED 28-6-2017 shall be linked to payment.

Like rent of 10000 per month paid for July-17 on 31-07-2017

Can we take ground that as amount paid is below 5000 per day, section 9(4) is not applicable.

Posts / Replies

[Amit Agrawal]

I think, by saying 'section 9(4) is not applicable', you actually meant to say that exemption under NOTIFICATION NO. 8/2017-CENTRAL TAX (RATE), DATED 28-6-2017 can be claimed in given circumstances. And if so, my views are as follows:

The relevant wordings used in proviso in said notification are as follows: 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.

And, in my view, such aggregate value needs to be worked out on the basis of 'time of supply' u/s 12 (3) & 13 (3) read with Section 15 of the CGST Act, 2017.

Now, as subject situation is covered u/s 13 (3) (a), 'time of supply' for entire rent for July, 2017 of Rs. 10,000/- will be 'date of payment' of such rent i.e. 31.07.2017.

And hence, one cannot claim subject exemption in given situation as aggregate value of such supplies so received exceeded five thousand rupees in a day.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Kunal Agrawal]

But Section 13 speaks about time of supply i.e. when to pay tax.

Now question is when notification 8/2017 specifically provide to calculate 5000 on daily basis and not on payment basis or liability basis, whether expenditure related to un-registered person can be calculated on daily basis or not.

In my opinion, when methodology is provided in notification itself, the same shall be followed.

[Amit Agrawal]

Quoting Shri Kasturi Sethi Ji: Dissent is Decent

With due respect, I feel that self-serving interpretation/s of any provisions / rules / notifications can be harmful to the tax-payer.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion. And I respect contrary views.

[vijay kumar]

Your argument is not sustainable for the following reasons:

In the instant case, value of supply received exceeded Rs.5000/- in a day.. It cannot be spread over the month.. RCM liability in this case is required to be determined in terms of Section 13(3) of the CGST Act'17 i.e. date of payment, which determines the tax liability of the recipient. Accordingly, the amount paid is the criteria, which in a day exceeds Rs.5000/- and hence RCM u/s 9(4) would apply since exemption under Nofn.8/2017-CT is not eligible.

Sn.13(3) - In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:––

(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply:

[Shilpi Jain]

The said exemption is not available now. The said notification is not effective now.

[KASTURI SETHI]

For status of Notification No.8/17-CT(R) dated 28.6.17, go through all notifications

q Amended by 38/2017-C.T. (Rate) dated 13-10-2017

q Amended by 10/2018-C.T. (Rate) dated 23-03-2018

q Amended by 12/2018-C.T. (Rate) dated 29-06-2018

q Amended by 22/2018-C.T. (Rate) dated 06-08-2018

q Rescinded/Superseded by 1/2019-C.T. (Rate) dated 29-01-2019.

[Kunal Agrawal]

This issue is related to period 01-07-2017 to 12-10-2017 hence Notification 8/2017 is valid for the period with proviso of 5000 per day

Our stand is although the provision was omitted w.e.f. 13-10-2017 but the benefit should be given w.e.f. 01-07-2017. The same view is expressed in minutes of GST council meeting.

And our 2nd stand is that as limit of 5000 in a day is provided, so calculation should be done on a day basis. Generally payment to small vendors like for tea, house keeping etc is paid on monthly basis. So, we calculate 5000 limit payment wise then notification will loose it's significance and purpose. Our argument is that once the notification provide for specific methodology, then the same should be followed and not what happens generally.

[KASTURI SETHI]

Sh.Amit Agrawal Ji,

Any phrase (used by me) is not my copyright. Thanks a lot, Sir.

[Kunal Agrawal]

We argued the matter before Commissioner (Appeals) (CGST) and got judgement in our favor.

[KASTURI SETHI]

Dear Kunal Agrawal Ji,

Congratulations for winning the case on merits.. It is a morale boosting and became a precedent and will be beneficial for the visitors of TMI site.

[Amit Agrawal]

Congratulations!

Kindly re-produce the findings given by Commissioner (Appeals), so as to understand his reasoning and offer comments therefor.