Section 9(4) of Central GST

This query is : Resolved

Ritesh (Querist)
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04 November 2019 Section 9(4) of Central GST is as below:

''(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient 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 the supply of such goods or services or both."

My query is whether this section is applicable from 01-02-2019 or not?

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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04 November 2019 Not applicable, Sec 9(4) has been amended to refer only to specified goods and services as notified by the Government and not all supplied. As on date only applicable to construction of projects, where they have to procure around 90% from registered persons if not rcm, cement under rcm if purchased from unregistered, rcm for capital goods if purchased from unregistered.

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Ritesh

Ritesh (Querist)
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04 November 2019 I didn't get your explanation. Can I have notification? As far as applicability of section is concerned, CBIC has postponed the same till 30-09-2019 vide Notification No. 22/2018 – Central Tax (Rate) dated 06-08-2018. However, vide Notification No. 01/2019 – Central Tax (Rate) dated 29-01-2019, CBIC has rescind previous notifications. Hence, it is confusing that whether the said section is actually applicable w.e.f. 01-02-2019 or not?

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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05 November 2019 FYI http://egazette.nic.in/WriteReadData/2018/188986.pdf

Ritesh

Ritesh (Querist)
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05 November 2019 Link is not working. Request you to please help in this regard.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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23 July 2025 Yes, Section 9(4) of the CGST Act is applicable from 1st February 2019, but with a major change from its original form.

📜 Original Position (Before Amendment):
When the CGST Act was first implemented (1st July 2017), Section 9(4) applied to all registered persons who procured taxable goods or services from unregistered suppliers.

This created a huge compliance burden.

⚖️ Amendment & Changes:
Due to practical difficulties, the Government suspended this provision through notifications multiple times.

Then, via CGST (Amendment) Act, 2018, effective from 1st February 2019, Section 9(4) was amended as follows:

✅ Amended Section 9(4) (from 01.02.2019):
"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 tax on reverse charge basis..."

🟡 Key Changes:
It no longer applies to all registered persons.

It applies only to specified classes of registered persons and specific categories of supplies.

Such applicability is to be notified by the Government on GST Council recommendation.

🛑 Current Status (as of your query on 4 Nov 2019):
As of 01.02.2019, Section 9(4 applies only in limited cases, for example:

🔹 As per Notification No. 07/2019-Central Tax (Rate) dated 29.03.2019:
Reverse charge under Section 9(4) is applicable only to promoters (builders/developers) purchasing goods/services from unregistered suppliers, in relation to real estate projects.

✅ Conclusion:
Yes, Section 9(4) is applicable from 01.02.2019 in amended form.

It is not applicable to all registered persons, but only to those specifically notified (e.g., real estate promoters).

You must refer to relevant notifications to see if your business class is notified.

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