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Table of Contents
[F. No. 354/320/2017- TRU]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 14th November, 2017
Notification No. 43/2017 - Union territory Tax (Rate): Seeks to amend notification no. 4/2017- Union Territory tax(rate) dated 28.06.2017 to give effect to GST council decision regarding reverse charge on raw cotton.
GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R. (E).- In exercise of the powers conferred by sub-section (3) of section 7 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.4/2017- Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 713 (E), dated the 28th June, 2017, namely:-
In the said notification, in the TABLE, -
(i) after Sl. No. 4 and the entries relating thereto, the following serial number and the entries shall be inserted, namely: -
| “4A. | 5201 | Raw cotton | Agriculturist | Any registered person”. |
2. This notification shall come into force with effect from the 15th day of November, 2017.
(Ruchi Bisht)
Under Secretary to
Government of India
Note: - The principal notification No.4/2017- Union territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 713(E), dated the 28th June, 2017and last amended by Notification No. 36/2017- Central Tax(Rate Union territory Tax (Rate) dated 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1295 (E), dated the 13th October, 2017.
📚 Frequently Asked Questions (FAQs): Notification No. 43/2017 - Union Territory Tax (Rate)
Q1: What is Notification No. 43/2017 – UTGST Rate?
Answer:
It is a GST notification issued on 14 November 2017 introducing Reverse Charge Mechanism on raw cotton supplied by agriculturists to registered persons.
The notification amended Notification No. 4/2017-UTT(R).
Q2: From when did raw cotton RCM become applicable?
Answer:
The notification became effective from 15 November 2017.
From this date onward, registered buyers became liable to pay GST under RCM on eligible raw cotton purchases.
Q3: Who is liable to pay GST under this notification?
Answer:
The registered recipient purchasing raw cotton becomes liable to pay GST under Reverse Charge Mechanism.
The agriculturist supplier does not collect GST.
Q4: What is the HSN code covered under this notification?
Answer:
The notification specifically covers HSN 5201 relating to raw cotton.
Correct HSN classification is important for proper GST compliance.
Q5: Why did the government introduce RCM on raw cotton?
Answer:
The government wanted to simplify GST compliance in the agricultural supply chain and shift tax responsibility to organized registered buyers.
This also improved tax administration efficiency.
Q6: Does every agriculturist need GST registration because of this notification?
Answer:
No.
The notification specifically shifts GST liability to the registered recipient under RCM, reducing compliance burden on farmers.
Q7: Can the recipient claim Input Tax Credit on RCM tax paid?
Answer:
Generally, eligible ITC may be available subject to GST conditions and proper compliance.
Businesses should maintain correct documentation and return reporting.
Q8: Is self-invoicing required under RCM?
Answer:
Yes, in many RCM situations proper self-invoicing and documentation become important.
Businesses should maintain clear records for audit and ITC purposes.
Q9: What happens if GST under RCM is not paid?
Answer:
Non-payment may lead to:
GST demand,
interest liability,
penalties,
ITC disputes.
This is why proper RCM review is very important.
Q10: Are processed cotton products also covered?
Answer:
The notification specifically mentions raw cotton under HSN 5201.
Processed cotton goods may have separate GST treatment depending on classification.
Q11: Why did textile businesses face confusion after GST implementation?
Answer:
The textile sector involves multiple tax rates, exemptions, agriculturist supplies, and long supply chains.
Frequent GST changes during 2017 also increased confusion.
Q12: Is this notification still relevant today?
Answer:
Yes.
It remains important for understanding GST treatment of agricultural supply chains and RCM applicability in the textile sector.
Q13: Did this notification apply throughout India?
Answer:
This notification applies under UTGST law.
However, similar corresponding notifications under CGST and SGST frameworks created comparable nationwide impact.
Q14: What is the biggest compliance risk under raw cotton RCM?
Answer:
The biggest risk is improper documentation and non-reporting of RCM liability.
Many businesses fail to maintain proper procurement records from agriculturists.
Q15: Should textile businesses conduct regular GST reviews?
Answer:
Yes.
Textile-sector GST rules evolved rapidly after GST rollout. Regular GST reviews help avoid RCM disputes, ITC mismatches, and compliance notices.
Businesses uncertain about applicability often seek professional guidance through GST Registration Services and expert GST advisory support.
Conclusion
Notification No. 43/2017 – UTGST Rate was an important GST reform for the cotton and textile sector.
The notification:
- introduced RCM on raw cotton,
- shifted GST liability to registered buyers,
- reduced compliance burden on agriculturists,
- and improved tax administration efficiency.
In practical terms, the biggest impact was on procurement accounting and GST reporting for textile businesses.
Download PDF: Notification No. 43/2017 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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