Treading GST Path XXVI - Cross border RCM

Sir, While discussing the provisions on reverse charge mechanism, it is opined by the learned author that CGST component alone would be payable on hotel services received from unregistered hotel under Section 9(4) of CGST Act, 2017. I wonder how a supply under GST law attracts only one tax component of GST which is conceptually sum total of SGST and CGST. The supply under GST law is either taxed or exempted from GST and I am of the personal view that supply cannot be partially taxed with one component of GST(by imposing CGST alone). It is in this context, I take recourse to the provisions of Section 25 and Section 26 of the CGST Act,2017 which seem to be relevant. Section 25(2) of the CGST Act, 2017 says that a person seeking registration under this Act shall be granted a single registration in a State or Union territory..... Thus perusal of the provisions of Section 25 would make one understand that registration is State specific in a State where business entity is registered whether registered under SGST Act or CGST Act. Further, Section 26 makes it abundantly clear that registration obtained by M/s ABC and Co in Tamil Nadu under TNGST Act,2017 is deemed to be a registration under CGST Act in Tamil Nadu only and the said registration of the company cannot be deemed to be a registration in terms of Section 26 to be a registration in Karnataka State. Therefore M/s ABC & Co is not registered in Karnataka and the provisions of Section 9(4) cannot be made applicable to the company to impose CGST alone going by the reasoning adopted by the author himself for not imposing SGST on hotel services received from unregistered hotel in Bangalore, Karnataka. Personal views expressed on the manner of imposing one tax component only without expressing any view on the tax liability on hotel services discussed.

rrkothapally rrkothapally 29/07/2017