INTEGRATED GOOD AND SERVICES TAX (AMENDMENT) ACT, 2018
Section 3 - Amendment of section 5
Amendment of Section 5: Reverse Charge Mechanism
The amendment to Section 5 of the principal Act involves a change to sub-section (4). The new provision allows the government, upon the Council's recommendations, to issue a notification that specifies certain registered persons who must pay tax on a reverse charge basis. This applies when they receive specific categories of goods or services from an unregistered supplier. Under this mechanism, the recipient of the goods or services is responsible for paying the tax, as if they were the supplier. All the provisions of the Act will apply to these recipients, making them liable for the tax on such transactions.
Note: It is an AI generated summary for reference purpose only.
Amendment of section 5.
3. In section 5 of the principal Act, for sub-section (4), the following sub-section shall be substituted, namely:––
"(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, 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 such supply of goods or services or both.".
