What is the Reverse Charge Mechanism(RCM) under GST?
The Reverse Charge Mechanism (RCM) is the process of GST Payment by the receiver instead of the supplier. In this case, the liability of tax payment is transferred to the recipient/receiver instead of the supplier.
Latest Update
- 54th GST Council Meeting – “To bring the renting of commercial property by an unregistered person to a registered person under the Reverse Charge Mechanism (RCM) to prevent revenue leakage.”
- GST Portal has introduced a new statement for reporting Reverse Charge Mechanism (RCM) transactions called RCM Liability/ITC Statement. View more
- 53rd GST Council Meeting Update: To simplify claiming ITC, the Council recommends clarifying that purchases under the RCM from unregistered suppliers follow a specific rule. When the recipient issues the invoice for such a purchase, the relevant financial year for calculating the ITC time limit under section 16(4) of the CGST Act will be the year the invoice is issued.
The Reverse Charge Mechanism is applicable in the case of :
- Imports
- Purchase from an unregistered dealer
- Supply of notified goods and services
This reverses the scenario as the person who is receiving the goods and services needs to pay the taxes. If the receiver is purchasing goods from unregistered providers, there needs to be a GST paid on their behalf. A payment voucher needs to be issued from the supplier to the recipient. The recipient must be a registered person as per Section 2(94) of the CGST Act,2017.
As per section 2(98) of CGST Act 2017, “Reverse-Charge” means the liability to pay tax by the recipient of the supply of goods or services or both instead of the supplier of such goods or services or both
- Under sub-section (3) or sub-section (4) of section 9, or
- Under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act
Need GST Billing Software for RCM Dealers
Current Situation in Reverse Charge Mechanism (RCM)
In the present scenario, the reverse charge mechanism is applicable in service tax for services like Insurance Agent, Manpower Supply, Goods Transport Agencies, etc. Unlike Service Tax, there is no concept of partial reverse charge. The recipient has to pay 100% tax on the supply.
In the earlier government scenario, it was hard to collect service tax from the numerous unorganized sectors just similar to goods transportation. The effort has been made to place the services as per the existing regime and Compliances and tax collections will, therefore, be increased through the reverse charge mechanism. Currently, there is no reverse charge mechanism on the What is Mixed and Composite Supply Under GST? The reverse charge may be applicable for both goods and services.
RCM Provisions Under GSTR Forms – GSTR 1 – GSTR 2
This system is being carried forward from the VAT regime. In case the supplier is registered, but the goods or services come under the reverse charge mechanism, the input tax credit cannot be claimed by the supplier as the tax is not credited by him but the receiver is paying the taxes.
In the case of importers of goods, taxes need to be paid under the reverse charge mechanism to the Government on the import. This is in addition to the import duties.
The details of the charges pertaining to the inward supply of goods or services are to be mentioned in GSTR 1. The details of inward supply are stated in the form GSTR 2.
A person who is liable to pay tax under the reverse charge mechanism needs to be registered under GST irrespective of the turnover.
The goods/service supplier gets the input tax credit that is paid under the reverse charge. The only condition is that the input tax credit is used only for the furtherance of business.
The list of services to be included under the reverse charge mechanism are:
- Goods Transport Agency
- Recovery Agent
- Director of a company or body corporate
- An individual advocate or firm of advocates.
- An insurance agent
The Scenario Where Reverse Charge Will Be Applicable under GST
Supply by Unregistered Dealer
In case an unregistered person is selling goods or providing any services to the registered person, then the liability to pay tax shifts on the registered person i.e. the recipient of goods/services, where such supply is of taxable supplies. No reverse charge mechanism in the case of exempted supplies.
The tax will be paid by the registered dealer and all the provisions of the act will be applicable to him as if he is the supplier of the goods or services The concept behind this is to prevent tax evasion since it would be almost impossible to collect tax from the unregistered dealer. It would increase tax compliance and promote transparency. Input credit will be allowed to the registered dealer for the tax paid by him under the reverse charge mechanism.
Recommended: What is Mixed and Composite Supply Under GST?
This extra compliance under the Act will force all the registered persons to purchase goods only from the registered dealers and this is what the new regime aims at.
Under RCM, Who is Responsible for Paying GST?
RCM requires that the recipient pay GST on goods/services. Nonetheless, in order to comply with GST law, the supplier of goods is required to indicate whether RCM tax is due on the invoice.
RCM GST payments should be made keeping the following points in mind:
- ITC on RCM tax amounts can only be claimed by recipients of goods or services if they are used to conduct business or further that business.
- If a composition dealer discharges liability under RCM, he should pay tax at the normal rates, not the composition rates. Additionally, they are not eligible to claim GST credit.
- RCM tax payables or charges can be subject to GST compensation cess.
For Services Provided by E-commerce Operator
In the case of services provided by e-commerce operators, the liability to pay tax lies on the recipient of services. If the assessee has no physical presence in the taxable area, then the representative of such an e-commerce operator will be liable to pay tax. If there is no representative, then the assessee has to appoint one who will be liable to pay GST.
For Services
CBEC has notified a list of services on which the reverse charge mechanism will be applicable under the GST
| S. No. | Provider | Recipient |
|---|---|---|
| 1 | Goods transport agency | Casual Taxable person, body corporate, partnership firm, any society, factory, any person registered under CGST, SGST, IGST Act |
| 2 | Recovery Agent | Banking Company, NBFC or any financial institution |
| 3 | A director of a company or a body corporate | A company or a body corporate |
| 4 | An individual advocate or firm of advocates, An arbitral tribunal | Any business entity |
| 5 | An insurance agent | Any person carrying on insurance business |
| More: Illustrative list on which the reverse charge mechanism is applicable for services |
Supply of Goods Under RCM
| S.No | Description of Supply of goods | Supplier of Goods | Recipient of Goods |
|---|---|---|---|
| 1. | Cashew nuts, not shelled or peeled | Agriculturist | Any registered person |
| 2. | Silk yarn | Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn | Any registered person |
| 3. | Raw cotton | Agriculturist | Any registered person |
| 4. | Used vehicles, seized and confiscated goods, old and used goods, waste and scrap | Central Government, State Government, Union territory or a local authority | Any registered person |
Supply of Services Under RCM
| S. No | Description of Supply of Service | Supplier of Goods | Recipient of Service |
|---|---|---|---|
| 1. | Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient | Any person located in a non-taxable territory | Any person located in the taxable territory other than non-taxable online recipient. |
| 2. | GTA Services | Goods Transport Agency (GTA) who has not paid integrated tax at the rate of 12% | Any factory, society, cooperative society, registered person, body corporate, partnership firm, casual taxable person; located in the taxable territory |
| 3. | Legal Services by advocate | An individual advocate including a senior advocate or firm of advocates | Any business entity located in the taxable territory |
| 4. | Services supplied by an arbitral tribunal to a business entity | An arbitral tribunal | Any business entity located in the taxable territory |
| 5. | Services provided by way of sponsorship to any body corporate or partnership firm | Any person | Any body corporate or partnership firm located in the taxable territory |
| 6. | Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, – (1) renting of immovable property, and (2) services specified below- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers. | Central Government, State Government, Union territory or local authority | Any business entity located in the taxable territory |
| 7. | Services supplied by a director of a company or a body corporate to the said company or the body corporate | A director of a company or a body corporate | The company or a body corporate located in the taxable territory |
| 8. | Services supplied by an insurance agent to any person carrying on insurance business | An insurance agent | Any person carrying on insurance business, located in the taxable territory |
| 9. | A banking company or a financial institution or a nonbanking financial the company, located in the taxable territory | A recovery agent | Services supplied by a a person located in nontaxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India |
| 10. | Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright-covered under section 13(1)(a) of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like | A person located in non-taxable territory | Importer, as defined in clause (26) of section 2 of the Customs Act, 1962(52 of 1962), located in the taxable territory |
| 11. | Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright-covered under section 13(1)(a) of the Copyright Act, 1957 relating to the original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like | Author or music composer, photograph her, artist, or the like | Publisher, music company, producer or the like, located in the taxable territory |
| 12. | Supply of services by the members of Overseeing Committee to Reserve Bank of India | Members of Overseeing Committee constituted by the Reserve Bank of India | Reserve Bank of India. |
Points to be noted:
No partial reverse charge will be applicable under GST. 100% tax will be paid by the recipient if the reverse charge mechanism applies.
- In the case of B2B import of other services, the tax shall be payable by the recipient of services
- In the case of B2B import of goods, the tax shall be payable by the recipient of goods
Liability of Registration Under RCM (Reverse Charge Mechanism)
Under Reverse Charge Mechanism who is liable to register in the new tax regime?
- A person who pays taxes under reverse charge is required to register under GST irrespective of the threshold and the annual threshold Limit is 20 lakhs (10 lakhs in the case of Hill states and North Eastern State)
Note: In the GST council meeting, states were given the liberty to impose a double threshold limit for registration i.e. 40 lakh up from the earlier INR 20 lakh.
Time of Supply
Under GST, time of supply means a particular point in time when the goods or services are rendered or supplied. It allows us to find out the tax rate, value and due dates for filing returns. Under the Reverse Charge Mechanism, the receiver is entitled to pay GST. However, the time of supply for supplying goods and services under reverse charge varies from the supplies which are under forwarding charge.
How do Find Out the Time of Supply under the Reverse Charge Mechanism (RCM)?
In the case of Goods: Time of supply in case of supplying goods when tax payable under Reverse Charge, whichever is earliest from the following dates:-
- the date of the receipt of goods;
- the date of payment as entered in the books of account of the recipient;
- the date on which the payment is debited in his bank account, whichever is earlier;
- the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier
Note: However, if it is not possible to find out the time of supply in the above-mentioned cases than the time of supply will be considered the date of entry in the books of account of the recipient of the supply.
Let us understand by an example given below:-
- Date of Payment – 18th June 2023
- Date of Invoice – 1st July 2023
- Date of Entry in books by the recipient – 19th June 2023
In this case, the time of supply will be 18th June 2023
If the supplier is located outside India, then the time of supply shall be the earliest of: ‘When the amount is paid i.e. the date of payment’
OR
‘When the recipient records the payment in his books of account’.
In the case of services: Time of supply in case of supplying services when taxes are payable under reverse charge mechanism, whichever is earliest from the following dates:-
- The date of payment; or
- The date immediately following after sixty days from the date of issue of the invoice by the supplier; whichever is earlier
However, if it is not possible to find out the time of supply in the aforementioned cases, the time of supply will be considered the date of entry in the books of account of the recipient of the supply.
Let us understand by an example given below:-
- Date of Payment – 18th August 2023
- Date of Invoice – 1st September 2023
- Date of Entry in books by the recipient – 19th August 2023
Note: In this case, the time of supply will be 18th August 2017, Due to some reasons if the time of supply can’t be ascertained under 1 or 2 heads, in this case, it will be 19th August i.e., the date of entry in books by the recipient.
There are two types of reverse charge scenarios mentioned in the law. The first one is dependent on the nature of the supply and the nature of the supplier. This is covered under section 9 (3) of the CGST/ SGST (UTGST) Act and section 5 (3) of the IGST Act. The second one taxable supply made by the unregistered person to a registered person covered under section 9 (4) of the CGST/SGST (UTGST) Act and section 5 (4) of the IGST Act.
The Manner of Payment of GST under the Reverse Charge Mechanism
As per section 49(4) of CGST Act’2017, ITC can be used for payment of output tax only. Therefore tax under reverse charge can be paid through cash only without availing the benefit of ITC. The supplier must mention in his tax invoice whether the tax is payable on reverse charge.
Input Tax Credit:
The service recipient can avail of Input Tax credit on the Tax amount that is paid under reverse charge on goods and services. The only condition is that the goods and services are used or will be used for business or furtherance of business.
If the composite dealer falls under the reverse charge mechanism then the dealer is ineligible to claim any credit of tax paid. The tax will be paid at the normal applicable rates and not at the composition rates.
Registration Requirement under Reverse Charge Mechanism (RCM):
As per Section 24 of CGST Act 2017, A person paying tax under the reverse charge mechanism has to compulsorily get registered even if the turnover is below the threshold limit.
Applicability of GST Compensation Cess:
GST Compensation Cess will be applicable on tax paid under the reverse charge mechanism also. The purpose is to compensate States for loss of revenue on the implementation of GST. This will be applicable for 5 years from the date GST gets implemented.
Important Points to be Taken Care Under RCM :
- Goods and services notified under section 9(3) or section 9(4) must have a person registered under GST.
- Under the reverse charge mechanism, the GST applicable must be submitted to the government on every 20th of next month
- The input tax credit will be available for all the RCM goods and services used for the furtherance of business according to the GST paid. And the service-acquiring individual, who is also paying the reverse charge can take the benefits of an input tax credit.
- There will be no auto-population of details of the GST paid under the RCM in GSTR 2, but it will be subjected to the manual furnishing of details.
- Wherever the RCM is applicable the invoice must be arranged by the recipient on itself while the invoices along with the consolidated purchases should be issued on a daily basis. on all the GST applicable who are under section 31(3).
- A payment voucher must be issued by the recipient during the period of supplier payment.
- The ITC is not available for the reverse charge payment to the authority.
- The composition scheme registered individuals also come under the reverse charge, well there will be no credit of RCM availed.
- The reverse charge mechanism applies to payments made in advance also.
Note: If in case, a dealer is unregistered under GST, then he is not allowed to deal in any interstate transactions. For any reverse charge mechanism to be applicable, there must be only intra-state transactions.
Conclusion: With the biggest tax reform ready to be implemented, the Reverse charge mechanism is not a new concept as we are already dealing with this in the service tax. But imposing a 100% reverse charge is definitely a big change. There are both pros and cons of this reverse charge mechanism but then no accurate conclusion can be drawn currently as to how society will be impacted by its imposition. On one hand, it will definitely be burdensome for the small supply receivers, but on the other hand, it will increase tax compliance for the country as a whole and would increase transparency.
My Company is GST registered. I have one transporter (Transport is indu & Unregistered, turnover is less than 5 lakh ) bill received by road without consignment note (this transporter using daily basis – inward & outward suppliers), but bill arising monthly (Inward and outward separately. GTA Applicable or not. If applicable, then rate how much 5% or 18%.
Hello Maam,
I want to know where to take the input with regard to purchase of equipment for business purposes while filing GSTR-3B for this month.
Also, if you would be kind enough to let me know the procedure for filing of GSTR-1 if i have manual billing system.
In GSTR-3B you need to mention the ITC on eligible capital goods in “Eligible ITC” column manually.
Hi
Is the Trust, who are working in development sector are exempt from GST.
Sir/Madam
I am registered GTA, providing transport services to Company. Let me know where i have to mention amount of my transport services in GSTR-3B and GSTR-1.
sir/madam, we are obtaining manpower supply service ( security agency supplies manpower and charges minimum wage + service charge from us) . Please clarify if GST is payable on entire bill amount or only on the service charge component of the bill. links to any relevant orders /notifications etc please be given. Thanks
When can i take the ITC of the taxes what i have paid on RCM?
if you have paid tax under RCM in advance then you can claim input in the same month. otherwise credit will be allowed in the next month.
So ideally if I had paid the paid under RCM of July 2017 in the month of July itself then i can take the credit. If I am paying it in August i can’t take the credit in the month of July.
Yes, you can utilise the credit of tax paid under RCM, after paying it in cash.
Madam.
For the purchase from URD, on date 15-Aug-2017, for an amount of Rs.10,000/-. I am liable to pay GST of Rs.1800/- as per RCM.
Can i take ITC of the same during filing of Aug 2017 returns if
(1) I pay Rs.1800 any day between 15-Aug-2017 and 19-Sep-2017. (i.e, before filing Aug returns)
(2) I pay Rs.1800 while submitting Aug Returns on 20-Sep-2017. Please clarify
You need to pay RCM liability in cash before filing of GST return for the concerned period and then you can utilize the ITC for the same.
I am sorry but this is not a precise reply to the question. The question is if RCM is paid before due date of filling August 2017 returns and before filling of August 2017 return then can input credit of RCM be claimed in return pertaining to August 2017 period.
Please answer if RCM can be claimed in GST Returns pertaining to August 2017.
Regards
yes, you can claim the input in the same month if it is paid before due date of filing return.
RCM of July paid in August, credit input in july or August? please help in this matter. if any notification or section please provide
RCM liability of July month must be paid in cash before filing return for the month of July and you can also use the ITC of same in the July month.
WE CAN USE NEXT MONTH 100% SURE
It can be used in the same month if deposited before filing return.
I AM SELLING EXEMPTED GOOD SO IF ANY RCM PAID BY ME IS REFUNDABLE TO ME ?
Refund of unutilized input tax credit can be claimed in the following two cases under GST:
why RCM liability would not fall in output liability??
Since ITC cannot be utilised for payment of tax under RCM.
You said that purchase of old gold and silver from customer by a jewellers is not a supply. Then where in GSTR 3 B we will show the consolidated value of such purchase
I am a dealer in un-branded Agro products i.e. not liable to GST.
So, I don’t have to pay RCM on Motor Freight for inward suppliers, Purchase Brokerage, Sale Brokerage, Godown Rent etc.
But, suppose I am re-seller of Sugar i.e. goods chargeable under GST, then Whether I have to pay RCM for Motor Freight for Inward supplies, Purchase Brokerage, Sale Brokerage, Godown Rent etc.? i.e. Expenses above Rs.5000/- per day per person ?
Thanks in advance
Dear Mam
Please clarify if a Regd.dealer based at UP purchases goods from 10 different cities on same date and GTA Service provider of every city charged 500 in his builty as transportation charges, whether I am liable to pay any GST on this or can I avail the exemption benefit of being less than 750/-. Thanks for your prompt reply.
No limit uptil now has been prescribed under GST for the exemption benefit.
Please clarify
A registered jewellers purchase old ornaments from customer (exempted from RCM GST) =Rs10000.
On that same day he makes a purchase from unregistered person = Rs3000
Therefore total unregistered purchase on that day is 10000 + 3000=13000
Q. Will RCM apply on 3000 ?
Purchase of old gold from from customer is not treated as supply. So limit of Rs. 5000 does not apply. Tax need not be paid on 3000.
Suppose I purchases goods from unregistered dealer for Rs. 1 Lac. and i made a purchase voucher under RCM and apply 18% CGST Rs.9,000 or SGST Rs.9,000.
Total RCM Rs.18,000/-
Now,
I sale to registered dealer
A is Interstate Dealer
Goods Rs. 50,000 @ IGST 18% 9,000
B is Intrastate Dealer
Goods Rs. 30,000 @ CGST 2,700 & SGST 2,700
Can we adjust RCM with Output taxes in same month?
Or
RCM deposited ?
If you’ve paid RCM in advance in the same month then first you may claim ITC in the same month. Otherwise in the next month. Yes, if you’re availing ITC against RCM paid then must mention in the GSTR-3 (i.e. monthly return).
I have a question, In GSTR 3B tax payable shown under RCM then we take the same amount of credit in input supply under RCM in July month or first we have to pay duty on RCM in cash and then credit taken in next month August. Please clarify
If you’ve paid RCM in advance in the same month then first you may claim ITC in the same month. Otherwise in the next month.Yes, if you’re availing ITC against RCM paid then must mention in the GSTR-3 (i.e. monthly return).
Reverse charge is 9(4) and 9(3) and GST liability u/s 9(4) can be adjusted from Input GST in same month or will be payable before then Input can be taken in next month
GST liability arises due to RCM can only be paid through Cash.
SAME QUETION:- WE HAVE TO PAID PURCHASE + SALE BOTH TAX BECAUSE SOME ONE TOLD ME FIRST – RCM TAX FROM SALE TAX THEN PAID
Suppose I purchases goods from unregistered dealer for Rs. 1 Lac. and i made a purchase voucher under RCM and apply 18% CGST Rs.9,000 or SGST Rs.9,000.
Total RCM Rs.18,000/-
Now,
I sale to registered dealer
A is Interstate Dealer
Goods Rs. 50,000 @ IGST 18% 9,000
B is Intrastate Dealer
Goods Rs. 30,000 @ CGST 2,700 & SGST 2,700
Can we adjust RCM with Output taxes in same month?
Or
RCM deposited ?
if RCM is paid in advance, then it can be adjusted in the same month. Otherwise in the next month.
I have a query, I have purchased from unregistered dealer and paid him on 15th June and paid the reverse charge liability on 17th August.
1 Is there any interest applicable on such reverse charge payment.
2. Can i claim ITC credit against GST liability in July month Return or shall i claim it in august month return.
1 GST liability for the month of July, 2017 is to be deposited on or before 20/08/2017. Interest liability arises in case you have not deposited the same before due date.
2 You can claim ITC paid for the month of July, in the return filing for July month.
Sir,
Please clarify,
RCM invoice dated is 01/08/2017
RCM payment deposited to govt., 10/09/2017
So if we are depositing in the month of September we claim ITC in September.
With means, taxable value under RCM is show in August month return and ITC will be shown in September return right.
Please clarify and if you know the relevant section kindly lets us know.
Yes if you deposit the amount under RCM in September then you will be eligible to take credit in September only.
I am registered dealer under GST in west Bangal. I purchased a laptop and a Scooty for business purpose of use fro a registered dealer. Can I take the benefit of ITC on the both and how.
I have 2 doubts regarding Reverse Charge. Plz suggest
1. I bought goods from other state from a registered dealer from a transport. The transport charge is Rs.470. Am i liable to pay reverse charges, if yes then in which form will I mention and how?
2. I bought goods from a composite dealer from same state and sold the goods in a GST bill. Am i liable to pay reverse charges, if yes then in which form will I mention and how?
1. Currently you have to mention it under point 4 “Eligible ITC” column of GSTR 3B.
2. Plz clarify your question.
1. You do not have to pay the reverse charge as consignment amount is less than Rs. 750.
2. No, you are not liable to pay Gst as the composite dealer would have already charged GST rate at a concessional rate.
Dear sir
Reimbursement to Auditors expenses like hotel stay,food,ticket,auto fair
is liable under gst on Rcm? what is rate of tax? if credit allowed?
Amount of Voucher is Rs.11950/-
RAVI CHRISTIAN
August 16, 2017 at 6:28 pm
We paid import duty on ice gate in July 17. The paid amount, we showed in bill of entry with 18 % IGST, mentioned party given without tax bill dtd 30/6, how to take entries, can we avail credit? Should we ask party to give bill in July only ? if yes with Igst ?
please clarify your question.
Is it required on show the premises of UNREGISTERED JOB WORKER as my additional place of business?
If goods are directly supplied by the principal from the premises of unregistered job worker then the principal should have declared the premises of an unregistered job worker as his additional place of business. If the job worker is a registered person then goods can be supplied directly from the premises of the job worker.
I HAVE A QUERY. SUPPOSE I HAVE EXCESS ITS (AFTER SET-OFF OF SGST&CGST LIABILITY) IN SGST AND CGST SAY OF Rs. 10000/- AND MY GST LIABILITY FOR GTA UNDER RCM IS OF Rs. 2000/-. CAN I SET-OFF SUCH RCM LIABILITY IN EXCESS OF SGST AND CGST (i.e. 10000-2000=8000)
PLEASE HELP
No, ITC cannot be used for the payment of tax under RCM.
I am in jewellery business. Suppose I purchase old gold from customer(no GST on RCM basis as clarified by FINANCE MINISTRY) = RS 10000.
On that same day I make URD purchase of Rs = 4000. Q. So will RCM apply on 4000 ?
I am paying rent for my business premises on quarterly basis. When will be GST on RCM basis be paid,
In case of unregistered landlord, RCM provisions are applicable. Payment has to be made quarterly in your case.
I purchased a laptop and Scooty for business purpose. Can I claim for ITC in gst and deprecition both on thsese
We paid import duty on ice gate in July 17. The paid amount, we showed in bill of entry with 18 % IGST, mentioned party given without tax bill dtd 30/6, how to take entries, can we avail credit? Should we ask party to give bill in July only ? if yes with Igst ?
Hello Guys,
Need a clarity on ISD registration. We have branches across India as sales support office and Registered office is located at Bangalore. If we get our branch office registered as ISD means can i transfer the GST credit to by HQ thru billing is it possible Major Input is on Rent, Telephone, Internet Charges, Hotel Lodging,Exhibition, & Courier Request to Reply & do the needful
Yes, you may obtain registration under GST as IDS provided ISD may distribute the credit subject to the following conditions:
My company is located in Mumbai and I have a client who needs material in Tamilnadu. He needs the goods on freight paid basis. So now the when I send the goods via a transport the transporter will charge me 2.5% CGST and 2.5% SGST on reverse charge mechanism i.e. the tax will not be collected by them instead i need to pay the tax on the transporters behalf. So now this is a cost for me and also i have to pay tax against it as per RCM.
So i want to know the following details in order to bill my client/recipient of goods. 1) Do i need to Mention freight charges separately?? if YES, then what will be the GST rate?? should i need to mention the same freight charge as charged by the transporter to me in the invoice or i can increase the value of the freight by adding some profit on it ?? If NO, then can i adjust the cost of freight + tax levied on it in my product cost and invoice him?? 2) Is the 2.5% CGST and 2.5% SGST charged by the transporter to me eligible for Input tax credit for me or the recipient of the goods. 3) also if you can share an invoice showing similar situation it would be of great help
If transportation cost is part and parcel of supply then GST has to be charged at the same rate of tax charged on supply. For example, If you are supplying goods to a party and charged taxed at 18%, then you have to charge tax on transport cost also at 18%.
Further it should be noticed that if you are not charging freight cost in invoice and is directly paid by buyer or recipient of supply, then he has to comply with GTA provisions including RCM. No ITC will not be available against the tax paid for GTA under reverse charge.
Freight Cost borne by customer is understod : that customer has to comply with RCM.
If we show the freight in invoice and transporter charging freight from us and we paying to the transporter on the behalf of customer, then should we comply to reverse charge or not. As we already paid GSt on the freight charges in invoice.?
Thanks
RCM ON SERVICES TAKEN FROM GTA BY A REGISTERED DEALER IS 5% OR 18% WITH INPUT TAX CREDIT CAN BE AVAILED,PLEASE CLEAR THAT CONFUSION, AT ONE PLACE ITS WRITTEN 5% WITH NO INPUT CREDIT & OTHER PLACE ITS SAID 18% WITH ITC. IS GST PAID ON EVERY SERVICES IS AVAILABLE FOR ITC IN B2B SUPPLIES. HOW TO ARRIVE , I WHETHER IGST, OR CGST/SGST IN RCM SERVICES.
On GTA services, Reverse charge mechanism is applicable with no ITC. Tax @5% is payable.
Can we avail ITC of RCM on the same month in which the RCM liability arises?
yes, you can avail ITC of RCM in the month in which the liability arises.
No, once you pay the tax under RCM of this month, the same amount of tax paid shall be available for credit in the succeeding month but not in the same month.
if it is reflected in your electronic credit ledger, then credit can be utilized in the same month.
Dear sir
Reimbursement to Auditors expenses like hotel stay,food,ticket,auto fair
is liable under gst on Rcm? what is rate of tax? if credit allowed?
Thanks in advance
Dear sir
1)against which tax (cgst,sgst,igst) we take credit of old stock excise?
we have purchased in June in +vat,& bond transfer basis. we are traders.
2)Godown rent paid to urd/rd
what if they don’t give bill and only receipt ?
can we still take credit on that ?
Credit of excise can be utilised against IGST.
I am a GTA and having more than 100 Trucks. I am registered in GST and providing service to only Registered Customers only. my Query is that : Should I have to file GST Return ?
Also
I have made expenses of Truck Repairing & Labour Charges but some of them are unregistered. Should I have to pay GST on these unregistered expenses and show all these expenses on GST Return if I have to file GST Return?
Yes, every registered person is required to file GST return.
Your answer is not proper and complete, If I paid labour charges to unregistered person (Pure labour contact) labour engaged in construction of commercial tower then RCM is applicable. If, yes then at what rate of GST is applicable if contractor belongs to out side the state.
I am registered dealer in west Bengal, I purchase goods from a registered dealer of UP. Goods are delivered by a unregistered transport of UP under his bilty by road. I have to pay RCM of Freight. what will be payment of RCM of the freight, either IGST or CGST+SGST, please clear it
IGST will be applicable in your case.
sir as per your previous reply we can avail ITC on office rent & payment to advocate/ca,,& kindly also advice do we can available ITC if GST paid on RCM on repair maintence of office building & vehicle & consultancy on recuitment expenses,,,,& employee tour exp with supporting of hotel bill & fooding exp voucher
sir as per your previous reply we can avail ITC on office rent & payment to advocate/ca,,& kindly also advice do we can available ITC if paid RCM on repair maintence of office building & vehicle & consultancy on recuitment expenses,,,,& employee tour exp with supporting of hotel bill & fooding exp voucher
Sir,
We had done work from Unregistered erection work contractor and the work is completed before june-2017 but exp we had booked in July-2017, is RCM applicable , bill date Is also june month.
With Regards
Paneer selvam
If you are charging GST then RCM is applicable.
Registered dealer of Gurgaon taken services of an Advocate in Delhi.
Which tax will be applicable i.e. IGST / CGST / SGST
IGST will be applicable.
i incur transport charge 1500-3000 on atleast 15 days of month. do i need to raise invoice on RCM for each such day.
Under GTA service provider (un registered dealer) will Charge GST on >750/- consignment freight?? and if multiple cns >750/- then will charge ?? like Service Tax ??
No such limits have been specified under GST . Tax@ 5% is applicable with reverse charge mechanism with no ITC.