Notification No. 15/2018 – Central Tax (Rate) Explained

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Notification No. 15/2018 - Central Tax (Rate): Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to specify services supplied by individual Direct Selling Agents (DSAs) to banks/ non-banking financial company (NBFCs) to be taxed under Reverse Charge Mechanism (RCM).

GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GSR......(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 13/2017- Central Tax (Rate), dated the 28^thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 692(E), dated the 28^thJune, 2017, namely:-

In the said notification, -

in the Table, after serial number 10 and the entries relating thereto, the following serial number and entries shall be inserted, namely: -

(1)	(2)	(3)	(4)
“11	Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs).	Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm.	A banking company or a non-banking financial company, located in the taxable territory.”;

in the Explanation, after clause (f), the following clause shall be inserted, namely: -
‘(g) “renting of immovable property” means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property.’.

2. This notification shall come into force with effect from 27^th of July, 2018.

(Gunjan Kumar Verma)
Under Secretary to the
Government of India

Note: -The principal notification No. 13/2017 - Central Tax (Rate), dated the 28^th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 692 (E), dated the 28^thJune, 2017 and was last amended by notification No. 3/2018 - Central Tax (Rate), dated the 25^th January, 2018 vide number G. S. R. 66(E), dated the 25^th January, 2018.

📚 Frequently Asked Questions (FAQs): Notification No. 15/2018 – Central Tax (Rate)

Q1: What is Notification No. 15/2018 – Central Tax (Rate)?

Answer:
It is a GST notification issued on 26 July 2018 that shifts GST liability to banks/NBFCs under Reverse Charge for services provided by individual DSAs 15.

Q2: From when is this notification applicable?

Answer:
It is effective from 27 July 2018 15.

Q3: What is Reverse Charge Mechanism (RCM)?

Answer:
Under RCM, the recipient of service pays GST instead of the supplier.
Here, banks/NBFCs pay GST instead of individual DSAs.
Need help with RCM compliance? 👉 Start with Finodha GST Compliance:
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Q4: Who qualifies as an “Individual DSA”?

Answer:
A natural person acting as a commission agent for loan sourcing, credit card sales, etc.
It does not include:
Private Limited Companies
LLPs
Partnership Firms
Planning to structure your DSA business? Explore:
https://finodha.in/private-limited-company/

Q5: If DSA is a Private Limited Company, does RCM apply?

Answer:
No. If the DSA is a company or LLP, GST applies under forward charge, not RCM.

Q6: Is GST registration required for individual DSAs?

Answer:
Even if turnover exceeds threshold, tax liability is under RCM. However, registration may still be required depending on other taxable supplies.
Confused about GST Registration?
👉 https://finodha.in/online-gst-registration/

Q7: What GST rate applies to DSA services?

Answer:
DSA services fall under SAC 9971 (financial services support) and generally attract 18% GST.

Q8: Can Banks/NBFCs claim Input Tax Credit (ITC)?

Answer:
Yes, banks/NBFCs can claim ITC on GST paid under RCM, subject to Section 16 of CGST Act.

Q9: Should DSA mention GST on invoice?

Answer:
No GST should be charged. Invoice must mention:
“GST payable under Reverse Charge”
Need help with proper GST return reporting?
👉 https://finodha.in/gst-return-filing/

Q10: Does this notification apply to commission agents other than DSAs?

Answer:
No. It specifically applies to individual Direct Selling Agents supplying services to banks/NBFCs.

Q11: Is TDS under GST applicable on such payments?

Answer:
Generally, banks may deduct TDS under Income Tax Act, but GST TDS provisions under Section 51 apply only to notified entities.
For Income Tax Return filing:
👉 https://finodha.in/income-tax-return-filing-online/

Q12: What happens if bank fails to pay GST under RCM?

Answer:
Interest under Section 50 and penalty under Section 122 of CGST Act may apply.

Q13: How should RCM be reported in GSTR-3B?

Answer:
Banks/NBFCs must:
Show tax liability in 3.1(d)
Claim ITC in 4(A)(3)

Q14: Does this affect MSME DSAs?

Answer:
Even if registered under Udyam (MSME), RCM still applies if the DSA is an individual.
Register MSME easily here:
👉 https://finodha.in/online-udyam-udyog-aadhar-msme-registration/

Q15: Why was this amendment introduced?

Answer:
To:
Reduce compliance burden on small DSAs
Ensure better tax collection from organized banking sector
Simplify administration under Section 9(3)