Page 8 - Ch3_RCM

Narayan Limited does not have any impact on the taxability of professional services supplied by

Tapasya & Associates to Narayan Limited.
Ü Therefore, Tapasya & Associates (i.e. the supplier) is liable to pay GST on such services under
forward charge.

Services by Recovery Agent
CCP 03.02.08.00
Yes Bank, located in Nagpur, appointed Mr. Mahesh as a recovery agent for collecting outstanding
balance amount of loan from one of its customer. Mr. Mahesh provided this service to Yes Bank for

which it charged a fee. Determine the tax implications as per CGST Act.
Answer:-
Ü As per section 9(3) of CGST Act, if services are supplied by a recovery agent to a banking company,
then GST is payable on reverse charge basis by recipient.

Ü In the given case, Yes Bank shall be liable to pay GST under reverse charge for services provided by Mr.
Mahesh as a recovery agent.

Service of transfer/ permitting the use/ enjoyment of a
Copyright relating to original literary works
CCP 03.02.09.00
Mr. Vicky Frankyn, an unregistered famous author, received ` 3 crore of consideration from Shiv
Bhawan Publications (SBP) located in Indore for supply of services by way of temporary transfer of

a copyright covered under section 13(1)(a) of the Copyright Act, 1957 relating to original literary
works of his new book. He finished his work & made available the book to the publisher, but has yet
not raised the invoice. Mr. Vicky Frankyn is of the view that SBP is liable to pay tax under reverse

charge on services provided by him. SBP does not concur with his view and is not ready to deposit the
tax under any circumstances. Examine whether the view of Mr. Vicky Frankyn is correct. Further, if
the view of Mr. Vicky Frankyn is correct, what is the recourse available with Mr. Vicky Frankyn to
comply with the requirements of GST law as SBP has completely refused to deposit the tax.
[CA Inter RTP May 2020] [CA Inter Jan 21 Exam -similar Question]

Answer:- Yes, the view of Mr. Vicky Frankyn is correct.
Legal Provision:-
As per section 9(3) of CGST Act, if services are supplied by an author by way of transfer or permitting the

use or enjoyment of a copyright covered under section 13(1)(a) of the Copyright Act, 1957 relating to
original literary works to a publisher located in the taxable territory, then GST is payable on reverse charge
basis by recipient.
Discussion & Conclusion:-

Ü In the given case, Mr. Vicky temporarily transferred copyright relating to original literary works of his
new book to the publisher – SBP.
Ü Therefore, the publisher – SBP is liable to pay tax under reverse charge.
Ü However, since SBP has completely refused to deposit the tax on the given transaction, Mr. Vicky

Frankyn has an option to pay tax under forward charge provided he fulfils the following conditions:-

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