YES BANK IS CHARGING GST OF 9% TO DSA (DIRECT SELLING AGENTS) INSTEAD OF 18%. WHAT IS THE RESPONSIBILITY OF DSA IN THAT CASE. WHETHER HE HAS TO PAY THE BALANCE AMOUNT. IN THAT CASE WHETHER HE HAS TO TAKE THE GST REGISTRATION

Reply—As per Notification No.15/2018-Central Tax (Rate) Dated: 26th July, 2018, provision of reverse charge mechanism is applicable on 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).

Thus, recipient of services of DSA i.e. Bank or NBFCs are liable to pay tax under reverse charge. Rate of GST is 18%.

Bank should charge 18% GST, there is no exemption for that.

 As per Notification no. 5/2017–Central Tax Dated June 19, 2017, the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on Reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the Act exempted from obtaining registration under GST.

Services provided by DSAs are also falls under section 9(3) of CGST Act, therefore a DSA is exempted from taking registration under GST. Under section 17(4) financial institution is eligible to claim 50% of ITC.