Section 9 of CGST Act, 2017 : Levy and Collection includes two major section of Reverse Charge Mechanism which is Sec 9(3) of CGST Act, 2017 and Sec 9(4) of CGST Act, 2017.

According to Section 9(3) of the CGST Act, 2017, the government announced a few particular kinds of supplies of goods and services, or both, on the basis of which the receiver will be required to pay tax based on the reverse charge mechanism.

This section depends on nature of supply and /or nature of supplier. The goods specified in the notification are –

S. No.Supply of GoodsSupplier of GoodsRecipient of Goods
1Cashew Nuts which should not be shelled or peeledAgriculturistAny registered person
2Bidi Leaves (Tendu)AgriculturistAny registered person
3Tobacco LeavesAgriculturistAny registered person
4Silk YarnAny person who manufacturers silk yarn from raw silkAny registered person
4ARaw CottonAgriculturistAny registered person
5Supply of lotteryState Government, Union Territory or any local authorityLottery distributor or selling agent
6Used vehicles, seized and confiscated goods, old and used goods, waste and scrap
Central Government, State Government, Union territory or a local authorityAny registered person

Among the services included in the notice are –

S. No.Supply of ServicesSupplier of ServicesRecipient of Services
1Taxable services provided by any person who is located in a non-taxable territory and received by any person who is in a taxable territory other than non assessee online recipientAny person who is in a non-taxable country.Any person who is located in a taxable country
2Services provided by Goods Transport Agency (GTA) in respect of transportation of goods by road.Goods Transport Agencya)any registered factory, b)any registered society, c)any corporative society established by any law, d)any person registered under CGST/SGST/UTGST Act, e)any body-corporate, f)any partnership firm whether registered or not under any law, g)casual taxable person
3Services provided by an individual advocate or firm of advocates by way of legal services, directly or indirectlyAn individual advocates or firm of advocatesAny Business Entity
4Services provided by arbitral tribunal
An arbitral tribunalAny Business Entity
5Sponsorship servicesAny PersonAny body-corporate or partnership firm
6Services provided by government or local authority, excluding –a)renting of immovable property, b)services specified below- i] services given by the Department of Posts in the form of speed post, fast parcel post, life insurance, and agency services to persons other than the government; ii]services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; iii] transport of goods or passengersGovernment or Local authorityAny Business Entity
7Services provided by a director of a company or a body corporateA director of a company or a body corporateAny person carrying on insurance business.
8Services provided by insurance agent to any person carrying insurance businessAny Insurance agentAny person carrying on insurance business.
9Services provided by a recovery agent to a banking company or a non-banking financial companyA recovery agentAny Banking company or a financial institution or a non-banking company
10Services by way of transportation of goods by ship/boat/vessel from a place outside India up to the customs station of clearance in India.A person located in non-taxable territory to a person located in non-taxable territoryThe customs station of clearance in India.
11Transfer or permitting the use or enjoyment of a copyright relating to music, an author, composer, photographer and artistic workAuthor or music composer, photographer etc.Publisher, music company, producer
12Radio taxi or passenger transport services provided through E-commerce operatorTaxi driver or a Rent a cab operatorAny person
13Supply of services by the members of Overseeing Committee to Reserve Bank of IndiaMembers of overseeing Committee constituted by the RBIReserve Bank of India

According to Sec 9(4) of CGST Act, 2017, on the recommendations of council government has notified a class of registered person in respect of specified categories of goods or services or both received from an unregistered supplier then such registered person shall pay the tax on reverse charge basis as the recipient of such supply of goods or supply of services or both.

Such transactions are always intra-state sales since an unregistered provider is unable to undertake inter-state sales.