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Goods & Services Tax , by Kanishka Mehta  on : Oct. 4, 2017

How did the famous musical band BEATLES inspire GST maker?

Do you know, there is a particular song that radio disc jockeys and TV news reporters, post offices in the US, play in the days very close to April 15? Its a song composed by George Harrison of the famous band "Beatles". Why do they play it? Because it talks of taxman... and... April 15 is the last date of filing tax returns by US individuals... You would be amused to hear the lyrics... they are there in the article...

Before I tell you of the song... I an eccentric generation X man - born in 1970s would quiz you on my previous ripple... right here... below...

Because... if you don't understand the previous ripple... then you would not understand even a scintilla of this ripple...

So... sharp minded... in case you wish to re-read my previous ripple (before attempting) then click here

And let me tell you that this song by BEATLES was so good... that... in 2006, Virginia State Senator wanted "Taxman" to become the state song of Virginia... and he actually introduced an amendment... however the measure did not pass...

Here is the quiz...



I am so happy... that you have attempted the quiz... and are still sticking around...

So, I kowtow before you and happily sing... the same song... in my old hoarse voice...

If you drive a car, I'll tax the street,
If you try to sit, I'll tax your seat.
If you get too cold I'll tax the heat,
If you take a walk, I'll tax your feet.
Don't ask me what I want it for
If you don't want to pay some more
'Cause I'm the taxman, yeah, I'm the taxman


Yes... that's the song...

and perhaps... section 9(3) and 24(iii) of the CGST Act 2016... follows it... to plug the loophole... that we learnt in my last ripple... yes the one I quizzed you on...

The loophole of charging GST when both the seller and the buyer are unregistered person..

Let me give you the details...

- Section 9(3) is enacted under Chapter III of the CGST 2016... And it empowers the government to notify the categories of goods, services on which the tax should be paid on RCM...

- Section 24(iii) is enacted under Chapter VI of the CGST 2016... it requires the RCM buyers to get registered... compulsorily... even though their turnover may be less than 20Lac...

Interesting... hunh...

...If you buy notified goods or services then you have no choice... other then... getting registered...

And once you get registered... you are no longer unregistered.... so pay tax.... LOOP CLOSED...

Sharp-minded, can I say now... that.. GST maker, very smartly, has given it a Midas touch?

Now, it can... cover all the colossal, big items... goods or services... under its GST bracket... by using 9(3)...

Yup...


And can we add to George... like he added later (perhaps)... "If your overweight , I'll tax your fat" to the song...

"If you sell silk yarn... I'll tax you through RCM

If you sell cashew nuts... not shelled or peeled... I'll tax you GST."

On the other note... let me tell you... that...

Reverse charge has been defined under section 2(98)... and you should understand it like this...

In normal cases, GST law states that seller should charge GST... and deposit it with the govt... but in some special cases... GST law reverses this process... and demands the buyer to pay GST straight to the government...and not to the seller.

And since the GST charging process has been reversed... so the name... REVERSE CHARGE... MECHANISM...

Now, for your good ears... here is the list... of goods and services... which the govt has notified... for RCM...

Shh...shhhhh.... only 4 items are there:

  1. Cashew nuts, not shelled or peeled
  2. Bidi wrapper leaves (tendu)
  3. Silk yarn
  4. Lottery


Although the government has provided the name of suppliers too... but I have avoided them... if you wanna find it out on your own then go to https://goo.gl/gbyQ9q and find it out on your own...


Sincere wishes for a good life...

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