Whether GST registration required if supplier engaged exclusively in making supplies covered under Reverse Charge?
This article attempts to answer the registration issue of those persons who are engaged exclusively in supply of goods & services which are covered under reverse charge mechanism (RCM). There are a number of goods & services which have been notified by the Government on which the tax shall be paid under RCM. Some of the examples are Goods Transport Agency (GTA), legal services provided by advocates, sponsorship services etc.
For complete list of items covered under RCM, Read the following article: https://www.taxwink.com/blog/rcm-under-gst
Further, we may refer the following notifications for better understanding of the goods & services on which the recipient shall pay taxes under RCM:
- Goods under RCM: Notification No. 4/2017- central tax (rate) dated 28.06.2017 effective from 01.07.2017, as amended till date
- Services under RCM: Notification No. 13/2017- central tax (rate) dated 28.06.2017 effective from 01.07.2017, as amended till date
Now it’s the time to answer the question covered by the title of this article “Whether GST registration required if supplier engaged exclusively in making supplies covered under Reverse Charge?”
The answer is “No”. If you are engaged in the exclusive supply of goods or services which have been notified under reverse charge mechanism, then you are not liable to get yourself registered under GST.
For this purpose, a notification has been issued by CBIC referring Notification No. 05/2017- Central Tax dated 19-06-2017 effective from 22-06-2017 which states as follows:
“In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017, the Central Government hereby specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration under the aforesaid Act.”
The above notification makes it absolutely clear that the persons who are ONLY engaged in making supplies of taxable goods or services or both on which RCM is applicable, they are exempted from obtaining registration under the GST laws. For example: A Goods Transport Agency (GTA) is exclusively providing goods transportation service by road to only notified persons, who are liable to pay tax on reverse charge, and not opting to pay tax @ 5% or 12% under forward charge method, is not required to register in GST.
Disclaimer: The above article is meant only for educational purposes. The article is merely the views and opinion of the author and it does not have any legal or corroborative value. Taxwink is not responsible for any loss or damage caused to any person on the basis of use of the above information. Readers are requested to consult a professional before placing any reliance on the above article. For any assistance please mail at: support@taxwink.com
