Important Keyword: GST reverse charge cotton India, RCM raw cotton GST, HSN 5201 GST, textile GST reverse charge, CBIC notification 43/2017,
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[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 - Central Tax (Rate): seeks to amend notification no. 4/2017- Central 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 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 amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.4/2017- Central 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. 676 (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-Central 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. 676(E), dated the 28th June, 2017and last amended by Notification No. 36/2017-Central 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. 1285 (E), dated the 13th October, 2017.
📚 Frequently Asked Questions (FAQs): Notification No. 43/2017 – Central Tax (Rate)
Q1: What is Notification 43/2017 in GST?
Answer: It introduces RCM on raw cotton.
This notification makes buyers liable to pay GST when purchasing cotton from farmers.
Q2: What is reverse charge mechanism (RCM)?
Answer: Buyer pays GST instead of seller.
It shifts tax liability from supplier to recipient.
Q3: Who pays GST on raw cotton?
Answer: Registered buyer pays GST.
Farmer does not charge GST.
Q4: What is HSN code for raw cotton?
Answer: HSN 5201.
This notification specifically applies to this code.
Q5: Can buyer claim ITC on RCM?
Answer: Yes, if eligible.
ITC can be claimed after paying GST under RCM.
Q6: Is farmer required to register under GST?
Answer: No, generally not required.
Agriculturists are mostly exempt from GST registration.
Q7: What happens if RCM not paid?
Answer: Penalty and interest may apply.
Non-compliance can lead to notices.
Q8: Is self-invoice required?
Answer: Yes, mandatory under RCM.
Buyer must issue invoice for such transactions.
Q9: Does this apply to all cotton?
Answer: Only raw cotton (HSN 5201).
Processed cotton may have different treatment.
Q10: Why did government introduce RCM?
Answer: To ensure tax collection.
Since farmers are outside GST, RCM fills the gap.
Q11: Is this notification still applicable?
Answer: Yes, subject to changes.
It remains important for textile sector compliance.
Q12: Does RCM increase cost?
Answer: Not necessarily.
ITC can offset tax, but cash flow may be affected.
Download PDF: Notification No. 43/2017 – Central Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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