Notification No. 12/2018 – Central Tax (Rate) Explained

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Notification No. 12/2018 – Central Tax (Rate): Seeks to exempt payment of tax under section 9(4) of the CGST Act, 2017 till 30.09.2018.

GST: [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i)]

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 8/2017 – Central Tax (Rate), dated the 28^th June, 2017, published in the Gazette of India,

Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 680 (E), dated the 28^th June, 2017, and last amended vide notification No. 10/2018-Central Tax (Rate), dated the 23^rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i), vide number G.S.R. 269 (E), dated the 23^rd March, 2018, namely:-

In the said notification, for the figures, letters and words “30^th day of June, 2018”, the figures, letters and words “30^th day of September, 2018” shall be substituted.

(Dr. Sree Parvathy S.L)
Under Secretary to the
Government of India

Note: - The principal notification No.8/2017-Central Tax (Rate), dated the 28^th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i) vide number G.S.R. 680 (E), dated the 28^th June, 2017 and last amended vide notification No. 10/2018-Central Tax (Rate), dated the 23^rd March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 269 (E), dated the 23^rd March, 2018.

📚 Frequently Asked Questions (FAQs): Notification No. 12/2018 – Central Tax (Rate)

Q1: What is Notification No. 12/2018 – Central Tax (Rate)?

Answer:
It is a GST notification issued on 29 June 2018 extending exemption from Section 9(4) RCM till 30 September 2018 12.

Q2: What is Section 9(4) of CGST Act?

Answer:
Section 9(4) required registered persons to pay GST on purchases from unregistered suppliers under Reverse Charge.

Q3: Till when was RCM under 9(4) suspended?

Answer:
Till 30 September 2018 12.

Q4: Does this notification permanently remove Section 9(4)?

Answer:
No. It only extended suspension. Later, Section 9(4) was amended to apply only to notified categories.

Q5: Who benefited from this exemption?

Answer:
All GST-registered businesses purchasing from unregistered suppliers.

Q6: Did businesses need to file RCM returns during this period?

Answer:
No RCM tax payment required under 9(4), but regular GST returns were still mandatory.
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Q7: Does this affect GST registration requirements?

Answer:
No change in registration rules under Section 22 & 24.
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Q8: Was ITC available if RCM was not paid?

Answer:
Since no RCM tax was payable, no ITC arose from such transactions.

Q9: Why was Section 9(4) suspended?

Answer:
To reduce compliance burden on MSMEs and small traders.
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Q10: Does this notification apply to Section 9(3)?

Answer:
No. Section 9(3) (specific RCM services like GTA, legal services) continued normally.

Q11: How is Section 11 connected to this notification?

Answer:
Notification issued under Section 11(1) which allows government to grant exemptions 12.

Q12: What happened after 30 September 2018?

Answer:
Government later amended Section 9(4) to apply only to specific notified classes of registered persons.

Q13: Should businesses maintain records during exemption?

Answer:
Yes. Proper documentation must be kept for audit purposes.
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Q14: Is this exemption still valid today?

Answer:
No. This was temporary relief. Current applicability depends on latest notifications.

Q15: What penalties applied if RCM was wrongly paid?

Answer:
If paid incorrectly, refund process under Section 54 could be used.
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✅ Conclusion

Notification No. 12/2018 – Central Tax (Rate) provided temporary relief by extending exemption from Section 9(4) Reverse Charge till 30 September 2018.

Although temporary, it played a crucial role in stabilizing GST compliance for businesses across India.

Understanding such notifications helps avoid penalties and incorrect tax payments.

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