Question3: Whether composite dealer/supplier who has purchased inputs from a unregistered dealer is liable to pay CGST/SGST under RCM or not ?

Answer: Section 9(4) is very clear and specific. It requires deposit of tax under reverse charge when supply is made by unregistered person to registered person. There is no differentiation within the section whether the person is registered as composite supplier or otherwise. So tax is to be charged in this case by composite supplier. In the GST Council meeting held on 06.10.2017, a decision was taken to postpone the application of Section 9(4) of CGST Act till 31.03.2018 but no Notification in this regard is issued yet, therefore, status quo position be maintained. It is to be mentioned here that application of Section 9(3) is not going to be affected. (Reply dt. 10/10/2017)