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[F. No.349/74/2017-GST (Pt.)]
Government of India
Ministry of Finance
Department of Revenue
New Delhi, the 13th October, 2017
Notification No. 38/2017 – Union Territory Tax (Rate): Seeks to exempt payment of tax under section 7(4) of the UTGST Act, 2017 till 31.03.2017.
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 (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 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 amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.8/2017- Union Territory Tax (Rate), dated the 28thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number
G.S.R. 717(E), dated the 28thJune, 2017, namely:-
In the said notification, the proviso under Paragraph 1 shall be omitted.
2. The exemption contained in the notification No.8/2017-Union Territory Tax (Rate) dated the 28th June, 2017 as amended by this notification shall apply to all registered persons till the 31st day of March, 2018.
(Ruchi Bisht)
Under Secretary to the
Government of India
Note: - The principal notification No.8/2017-Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i) vide number G.S.R. 717(E), dated the 28th June, 2017.
📚 Frequently Asked Questions (FAQs): Notification No. 38/2017 - Union Territory Tax (Rate)
Q1: What is Notification No. 38/2017 – UTGST Rate?
Answer:
It is a GST notification issued on 13 October 2017 extending exemption from reverse charge tax under Section 7(4) of the UTGST Act till 31 March 2018.
The notification reduced compliance burden on registered persons.
Q2: What was Section 7(4) related to?
Answer:
Section 7(4) dealt with reverse charge liability on supplies received by registered persons from unregistered suppliers.
This created significant compliance challenges during early GST implementation.
Q3: Why was this exemption introduced?
Answer:
The Government introduced this exemption because businesses were struggling with reverse charge compliance on routine purchases from unregistered vendors.
The aim was to simplify GST implementation.
Q4: Till when was the exemption available?
Answer:
The exemption was extended till 31 March 2018.
Q5: Did this notification permanently remove reverse charge provisions?
Answer:
No.
It only granted temporary exemption from payment of tax under the specified reverse charge provision.
Q6: Which businesses benefited the most?
Answer:
MSMEs, traders, restaurants, manufacturers, and local businesses benefited significantly because they regularly purchased from unregistered suppliers.
Q7: What was the practical difficulty under reverse charge?
Answer:
Businesses had to:
issue self-invoices,
track vendor status,
calculate GST separately,
maintain additional records.
This created heavy compliance burden.
Q8: Did this notification affect all reverse charge provisions?
Answer:
No.
The notification specifically related to reverse charge under Section 7(4) concerning purchases from unregistered suppliers.
Other reverse charge provisions could still apply separately.
Q9: Why did the GST Council support this relief?
Answer:
The GST Council recognised that businesses needed transition support during early GST implementation.
Compliance simplification became a major priority.
Q10: Was tax already paid refundable because of this notification?
Answer:
The notification primarily granted prospective exemption relief.
Specific refund eligibility would depend on separate GST provisions and factual circumstances.
Q11: Did businesses still need proper vendor records?
Answer:
Yes.
Even during exemption period, maintaining vendor and procurement records remained important for audit and compliance purposes.
Q12: Why was GST compliance difficult in 2017?
Answer:
GST was newly introduced and businesses were adapting to:
HSN classification,
return filing,
ITC matching,
reverse charge,
invoice rules,
ERP system updates.
Q13: Is this notification still relevant today?
Answer:
Yes.
It remains important for understanding the evolution of reverse charge provisions and GST transition policy.
Q14: Did this exemption apply automatically?
Answer:
Generally yes, subject to applicability under the amended notification framework.
Businesses still needed proper compliance understanding.
Q15: Should businesses regularly review GST notifications?
Answer:
Absolutely.
GST law changes frequently, and relying on outdated compliance assumptions can create tax disputes and penalties.
Businesses uncertain about applicability often seek guidance through GST Registration Services and professional GST advisory services.
Conclusion
Notification No. 38/2017 – UTGST Rate was one of the most important GST relief measures during the early implementation phase.
By extending exemption from reverse charge tax on purchases from unregistered suppliers, the Government significantly reduced compliance burden for businesses.
Download PDF: Notification No. 38/2017 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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