Q 1: If an Assessee pays GST on behalf of an unregistered supplier/SSI/exempted unit, will he be able to take Input Tax Credit of the GST paid on reverse charge basis ?

Ans: Yes, input tax credit of tax paid on reverse charge basis by the recipient is allowed to the recipient and the credit can be taken even in the same month.

Q 2: Whether, any Indian providing services to PayPal on contract basis is required to pay reverse charges on charges deducted by PayPal?

Ans: It depends on the nature of charges deducted. The place of supply is outside India but as the supplier is located in India, it is a case of interState supply and subject to IGST. It will be zero rated if the sale proceeds are realized in convertible foreign exchange.

Q 3: Under the new GST Act, the liability or payment of GST still with consignee or consignor?

Ans: No. Reverse charge mechanism has been provided in GST law for GTA and the recipient of GTA service ( he may be consignor or consignee) is required to pay GST. Notification No 13/2017-Central tax (rate) may be referred to.

Q 4: Whether RCM is applicable on payments made for hiring of transport from unregistered GST traders?

Ans: RCM under section 9(3) is applicable for GTA and not for transport of goods. Where the vehicle is taken on rent or lease , it will be supply of service under 9966 or 9973 and supply of service will be taxable under RCM under section 9(4).

Q 5: We are also paying small payments like unloading charges, detention charges and under miscellaneous payments to petty contractors. Is GSTN under reverse charge applicable for these payments?

Ans: If you are not registered, payment on reverse charge under section 9(4) of CGST Act, 2017 is not required. That said, if such services availed fall within the domain of any service that is subject to reverse charge under section 9(3) of CGST Act, 2017 you have to get yourself registered and GST has to be paid.

Q 6: Can any unregistered transporter having a turnover below 20 lacks carry the goods for a registered dealer?

Ans: Yes, GTA can carry the goods. GST on GTA services is liable to be paid on RCM basis by the recipient. The supply of services of goods transport by road transporter other than a GTA and a courier is exempted under Notification No. 9/2017- Central Tax (rate).

Q 7: Whether reimbursement of expenses to staff comes under RCM?

Ans: Re-imbursement is an expense in the course or furtherance of business and if the same is against a taxable supply taken from an unregistered supplier, RCM will apply.

Q 8: Whether tax under RCM is applicable for expenses incurred towards doctor sponsorship programme?

Ans: As per notification no. 13/2017-Central Tax (Rate), Sl. No. 4 sponsorship to anybody Corporate/Partnership firm comes under RCM.