Question: If for GTA services, supplier is opting 5% rate and also it has applied GST @5% on Invoice and deposited the same. However, recipient of such services has not deposited the GST under RCM. Can Recipient be held for this? Is it not a revenue neutral case for Department?
.Ans. There can be no double taxation under tax laws in India. Hon’ble Supreme Court has held an ‘assessee in default’ only when the recipient of income has also failed to pay such tax directly. Hindustan Coca Cola Beverages (P) Ltd., vs. CIT 293 ITR 226 (SC). However, the above case might not come to the rescue of the assessee in GST for the simple reason that in case of reverse charge, the output in the hands of the supplier is considered as exempt supply and therefore the above Supreme Court ruling will help only if the supplier has paid the entire tax by debiting his cash Ledger. Secondly, in order to substantiate the fact that the supplier has paid the entire tax in cash, the entire access of the books of accounts and challans and all records of the supplier must be made available to the buyer. Normally, in case of independent parties this is not possible. Therefore, in absence of substantiation, the Court might not provide relief from double taxation to the buyer. Thus, in such cases it is advised to obtain all requisite records or at least a certificate from Chartered Accountant to show that the entire tax has been paid in cash by the supplier.
