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.
As RCM exempted till 31.03.2018 while filing GSTR 3B November return where the amount I have paid to an unregistered dealer to be shown. please guide. In my case, i have paid office rent to unregistered dealer Rs.45000.
Please reply. Where should the amount (office rent) I have paid to an unregistered dealer to be shown on November GSTR 3B?
As RCM provision are withheld, so now there is no tax liability arises in case of service received from an unregistered dealer.
I pay Rs.45000 rent to an unregistered dealer for my office. Where should I have to show this amount in GSTR 3B?
RCM for the period from 1/7/2017 to 13/10/2017 to be paid in December – will I get input credit? – If yes for which month
Tax liabilities are to be discharged monthly while filing the GSTR-3B for the concerned month and you can avail the credit for the same just after paying it in cash.
GST paid on reverse charge for availing GTA services (Regd). In which part of GSTR 3B the Input Tax Credit be shown – whether under Part A of ITC or Part B under All Other ITCs?
You have to show it under “Inward supplies liable to reverse charge” column
If rent is being paid from Chandigarh for an office in Delhi, will it be covered under IGST or CGST and SGST in case of RCM?
As the rented property is in Delhi, so the place of provision will be at the place of property. If the service provider is of the same state where property persists, then CGST+SGST will be applicable and in other cases, CGST will be applicable.
Sir, I availed GTA (registered) services for Rs.1400/- from Mumbai to Goa. Do I have to pay IGST Rs.70/- (@5%) and can I avail ITC for the same?
You can take the ITC of GST paid on GTA services availed.
Can anyone give me the right advice, please! We are mfg co. Delivering material to our customer through a local tempo {Unregistered} he raise bill to us & we paid 5% (sgst+cgst2.5%) RCM on bill amount till (Sept- Return). We got it ITC & we utilized also, but when we paid RCM in November( for OCT. Return) on same tempo bill this time ITC is not showing in ITC ledger in DEC. Month. I want to know what is the new rule for RCM credit (Tempo Charges) & can we claim for our Nov- return & can be utilized?
For your more info for RCM payment, we generated separate challan every time.
RCM on supplies from unregistered dealers have been suspended from 13.10.2017 up to 31.03.2017. so no RCM liability arises from 13.10.2017 with respect to supplies from unregistered dealers.
Ok Thanks, Sir, did u mean, if we already paid Rcm in Nov-14.11.17 (For Octobers Liability) against unregistered (GTA) bill, we cant claim & utilized for Dec-17’s Liability? in very short we lose our money because of lack of knowledge? correct?
Waiting for your response.
Regards
Since registration is not mandatory for GTA service provider in case he is providing only services liable to reverse charge, and in your case, as you have paid tax under RCM, you can avail the credit for same in the next month and if some problem persists, you can contact to the department.
Thanks, Sir, for your valuable advice & as well as time also. This is a big relief to me. we will contact GST office also.
I hope your corporation will continue for small taxpayers, who unable to pay consultancy fees.
I pay Rs.45000 rent to an unregistered dealer monthly for my office. Where should I have to show this amount in GSTR 3B as RCM is suspended?
Dear Sir, Can ITC is eligible for Furniture purchased after July 2017 used for the office of Business.
Kindly suggest at the earliest. Please send rule and low link
Yes, ITC can be claimed for the office furniture.
Thanks A lot Sir
Hi, Our proprietorship business is paying professional fees 50k per month to an unregistered person in the same state. Are we liable to pay GST for the reverse charge or it is postponed until 31/03/2018??
Kindly Reply
All the provisions related to supplies from an unregistered dealer are kept on hold from 13/10/2017 to 31/03/2018 by CBEC.
We are registered organisation under GST. We want to purchase “Trophy” amounting to Rs. 50,000/- above from an unregistered person. In that case is GST under RCM is payable by us? If yes, please send the rate of GST on it. Also, can we take the ITC on that? Please help.
RCM on purchases from an unregistered dealer has been suspended up to 30.03.2018. so no GST is payable.
Thanks…
Sir/Madam, we made an agreement with a clearing and forwarding agent for clearing Railway wagon (Rice Bran-Loading and unloading from railway wagon) and transportation to our warehouse at the prescribed rate. GST on Transportation charges and clearing charges paid through Reverse Charge Mechanism (on the basis of GTA) at the rate of 5% as per Notification No. 13/2017- Central Tax (Rate) dtd 28.06.2017, but service provider demanding 18% of GST on transportation and clearing charges in their invoice. Kindly advise us on whether clearing charges come under 18% tax bracket or it comes under the GTA purview with reverse charge liability at the rate of 5%.
Regards
Prasanth
We paid RCM for the month of July 17 on August 17. Now when we take an input of it in the month of July 17 or August 17? We generate RCM self-invoice on 31st July 17, so when we should enter it on GSTR 2 of July 17 or August 17 for taking input credit.
Shortly RCM paid for july17, in which month to show in GST3B & GSTR 2?
Credit can be claimed in the month of August. but the details have to be shown in GSTR 2 in July month.
Thanks for such a nice Article, great help to know RCM.
Hello, I have read the comments sections but still have some doubts, can you please help and clarify,
1) Goods i.e, business activity goods in my case sarees, if purchased from weavers who were unregistered were liable for RCM which we have paid since July. Do all goods and services Accept those in 9(3) come under 9(4)? by virtue of which all supplies of goods received from URD are not liable for reverse charge post 13th Oct till 31 March 2018.
2) we get goods from other states, wherein the transport L R copy if from a different state ? while paying the amount for the transport charges here the invoice we receive is from the GTA are from local office with GST number mentioned but GST not collected. Am I Liable for Reverse Charge?
3) I heard somewhere that if the GTA invoice is below 750 per consignment we are not liable for GST RCM, Is it True?
4) I have paid rent to an unregistered person, Earlier we paid GST under RCM, what about now?
5) Job work was done by an unregistered person, earlier paid under RCM, what to do now ? in my case it is saree finishing, printing, embroidery charges etc.
Awaiting your reply, Thanks in Advance
I am a registered GST dealer. I have paid Advance to Supplier for the purchase of machinery. Under RCM, am I liable to pay GST to Govt. or my Machinery supplier is liable to pay GST to Govt. on Advance?
GST on advance payment is to be paid by the supplier only.
Machinery supplier is to collect Tax in Advance and to pay. Buyer is not required to pay Tax under RCM. But presently this provision is under suspension.
CAN A GTA GO FOR BOTH FORWARD AND REVERSE CHARGE SIMULTANEOUSLY IN SAME FINANCIAL YEAR
As GTA services are covered under RCM and as per latest decisions are taken by GST council, RCM on unregistered dealers withheld till 31/03/2016, so GTA will always be covered under RCM.
WE ARE PAYING GUEST HOUSE RENT OF Rs.12500/-pm WHICH IS USING FOR COMPANY GUEST PURPOSE. IS IT REQUIRED TO PAY GST UNDER RCM?
Rent services are not covered under RCM and also as per latest decisions of GST council, RCM provisions related to supply from unregistered persons are kept on hold till 31/03/2018. So in this case service provider liable to pay tax.
We are in the business of constructing roads(construction business), is ITC eligible for Inputs OR not?
Sir, RCM on GTA now applicable..? if applicable, can be avail the RCM paid for GTA on next month as input..?
Dear Sir/Madam,
We are GTA, please confirm under GST regime whether we can alter our invoice date for billing to our customers, few of our customers are demanding for the date change of our invoice that was already generated during the month of August, since due to delay in receiving POD we were unable to submit our invoice on the same month.
Kindly advise
Sir, I am a registered composition dealer and have two query on GTA services:
1. Some GTA are registered but are not charging GST on their invoices? So whether in this case do we need to pay GST under RCM? what would be the rate? Whether ITC would be available? And whether the limit of 5000 is applicable?
2. same questions as mentioned above but with respect to those GTAs who are not registered?
If GTA is registered then GST has to be paid under reverse charge mechanism. GTA should charge GST on the invoice issued. If GTA is not registered then no RCM liability arises from 13.10.2017 since RCM on supplies from unregistered persons have been suspended from 13.10.2017.
Dear sir/Madam,
In what section/provision/notification/circular/meeting says that (If GTA is registered then GST has to be paid under reverse charge mechanism). Please do needful to me.
Notification no. 13/2017-Central Tax (Rate) dated 28.06.2017 (sr.no.1) as amended by notification no. 22/2017-Central Tax (Rate) dated 22.08.2017.
SIR, AS RCM ON URD PURCHASE, IS POSTPONED FROM OCTOBER-17 NOW WHEN WE ARE FILLING GST 3B OF OCTOBER MONTH WHERE TO SHOW AMOUNT OF URD PURCHASE DONE AFTER 13/10/2017?
You need not show the purchase from an unregistered dealer for which RCM has been postponed.
Do we to pay GST on reverse charge till 12th Oct. There is not the official date for deferral off GST under reverse charge.
yes, reverse charge has been suspended from 13.10.2017. It will be applicable on the transactions effected before 13.10.2017.
Is there any specific column for showing the purchase from an unregistered dealer for which RCM has been postponed. Form GSTR 3B don’t have any specific column.
no, there is no such specific column to mention that.
Sir, Reverse charge is withheld up to 31-3-2018. Is it applicable to Pvt Ltd company also?
The only reverse charge on supplies from an unregistered dealer has been suspended up to 31.03.2018. on other services, it continues to be applicable.
Sir is deferment also applicable to previous purchases made from an unregistered supplier before the date of this notification?
And sir how the composition dealer will issue the self invoice to pay the reverse charge as he can’t charge GST on his invoice?
Is Reverse charge on GTA payable on CGST & SGST only? Is not It Payable on IGST after Suspension (13.10.2017)?
no, it has to be payable on interstate supply also.
A Company X is registered in Delhi (with GSTIN No.) and has Branches / Operational Projects in 20 states each with their GSTIN Nos. The Regd Office of X enters into a central contract with GTA D registered in Kolkata (with GSTIN No.) for transportation of goods, from anywhere in India to anywhere in India, including its Branches and undertakes transportation of goods intra-state and interstate. The payments for transportation will be made by the Work Order placing branch of X. GTA D also has Branches in 23 States each with their GSTIN Nos. Against Work Orders placed by, say Ahmedabad Branch office of X for transportation of goods (a) from Bhuj to Ahmedabad and (b) from Agartala to Ahmedabad, and (c) from Ahmedabad to Trichy, the trucks are arranged by the respective Branch offices of GTA D and materials are transported. Can the different branch offices of GTA D raise Tax Invoice on the Work Order placing the branch of X or the Invoice needs to be raised only by the Regd Office of D? The GST payments will be on RCM. However, what will be the type of GST chargeable by D, i.e. IGST or CGST-SGST in each of the above 3 scenarios? Though the query is pretty long, will be beholden for a clear reply. Thank you.
As per provisions of place of supply, in case of transportation of goods by GTA to registered person place of supply will be the location of recipient, so as in your case payment is to be made by order placing branch and also the place of supply is location of recipient, so CGST and SGST will be applicable. As GTA also have registered at the place from which services are provided, they can make tax invoice by mentioning the place of supply and GSTN details of order placing the branch of X.
Please give me advice for Director Salary, Director Remuneration and how many Services is in GST RCM
Check on the given link: http://www.cbec.gov.in/resources//htdocs-cbec/gst/list-of-services-under-reverse-charge-2.pdf;jsessionid=C7642F8601C5197E2EBD81090446835F
Hello,
I am small time supplier selling online mainly numismatic coins/ notes, handicraft items. I buy mostly from individuals who are not dealers. As per the rule, RCM was admissible in case the purchase is more than Rs. 5000 in a single day. My purchases are less than 5000 on any given day and I mostly pay cash to them. Please clarify on the following points:
What all documents do I need to maintain for such purchases?
Also, I inherited some old coins/ notes from my parents as well as I collected from my childhood. How do I show it in my books of accounts for selling them?
Thank you.
As per decisions are taken on 22nd GST council, RCM provisions related to purchase from unregistered dealers are withheld till 31/03/2017.
HI. We have paid freight to a GTA of Rs.6900 for the month of July. The said GTA is unregistered but has issued a GC note…Now, as regards to RCM, I cannot update it in table 4A of GSTR 2(RCM supplies), because the GTA is unregistered…Now, where to show this freight expense from unregistered GTA in GSTR 2 so as to comply with the RCM provision?
You can show it in column 4B of GSTR-2
Hi,
If supplies/services are provided in the different state by vendors of the same state, that what will be applicable, IGST or CGST/SGST. e.g if Vendor of Maharashtra provides some services in Goa to the registered person in Maharashtra, the what should service provider charge the recipient of services, IGST or CGST/SGST.
If the service is provided at the fixed establishment at Goa than IGST will be applicable otherwise CGST/SGST will be applicable.
What is the definition of business entity as per GST ? Are schools providing education up to senior secondary are covered under the definition of business entity?
Dear sir, I have filed GSTR-1 and filled wrong GST number of party and hence party rejected this bill and showing in GSTR-1A. PLEASE ADVICE ME HOW TO CORRECT GST number. SHOULD I ACCEPT GSTR-1A OR REJECT. AS PARTY IS CORRECT AND BILL RELATED TO OTHER WITH THANKS
As you have filed wrong GST number of the party in GSTR 1 and party rejected the bill and showing in GSTR 1A but when the party will file GSTR 2 then the bill will get reflected in your GSTR 1A then you can accept that entry in GSTR 1A.
SIR, I have shown unregistered purchases of rs 200000 in July 3B. But how to show this amount in GSTR 2 i.e whole sum up the amount as shown in 3B or invoice wise 30-day invoices i.e bifurcated value of Rs 200000?
Our company employee went for official work at other state and made expenses for the hotel from an unregistered supplier and we paid directly vide NEFT to an unregistered supplier. Now the question is how we reflect in an account as the amount is liable to RCM of GST because transaction to an unregistered supplier to other states not possible.
The gstr-2 form has the last column of HSN detail but the system is not accepting exempted goods in HSN detail. Should I left exempted goods and feed only taxable goods detail HSN wise? with thanks
HSN details for exempted goods are not required.
If my GTA is unregistered and I have 300 transportation charges. Do I have to pay Reverse Charge?
Reverse charge mechanism on supplies from unregistered persons have been suspended until March 2018.
We have been paying Rent+GST to the registered landlord for our factory (registered business). Now that RCM is suspended, do we still have to pay rent + GST?
One of my friends is having a business the T.O of which is not likely to exceed Rs.20 lakhs.
Meanwhile, when he is billing his clients,
a> shall he bill in Bos or Invoice.
b> Shall the receiver of service pay GST on RCM basis.
c> If his T.O exceeds 20 lakhs in this year, shall he has to deposit GST on old bills also.
d> Shall he has to file his return quarterly?
Thanks ,
(RANJAN)
If a voluntary registration under GST is opted for then all the provisions as applicable on the person who is mandatorily required to obtain registration applies on the person who gets voluntary registration even if the turnover is less than the threshold limit. So tax invoice will be issued. Returns shall be filed on monthly basis.
Sir,
We have paid Freight Charges to Interstate GTA (Registered under GST) through NEFT in the month of July against their Consignment Note. They have not issued Tax Invoice and not uploaded details in their GSTR1. We have paid Tax under RCM. Please clarify where to show this transaction in GSTR 2 and whether we will add details under MISSING INVOICES.
You have to add under head “Inward supplies on which tax is to be paid on reverse charge” under GSTR 2. Yes, you can add details under “missing invoices”.
RCM ON GTA PAID INPUT CREDIT ON CONSIGNMENT DOCUMENT/INVOICE IF GTA
We made URD purchases during September and made direct exports of the purchased products by filing an LUT. How the URD purchases will be treated since no GST is paid on export of the same. Do we have to pay GST on reverse charge even when the same product is directly exported? please advice. thank you
As you have chosen the option of LUT, and as you have purchased from an unregistered dealer, you first need to pay the tax on purchase under RCM and then you can claim ITC of such tax.
But RCM is postponed. Then what would be done?
As per the latest decisions are taken under GST council meeting, RCM provisions related to an unregistered person are abolished till 31/03/2018, so now normal provisions will prevail i.e. seller needs to pay tax.
Dear Sir,
What is the tax percentage decided to pay as RCM for a rented property? Say, I’m paying Rs 20,000 as rent to an unregistered dealer, will I’ve to pay 5% or 18% of the rent as RCM?
Also, we receive goods from the suppliers wherein the supplier dispatches the goods through the transport by road, so we’ve to pay 5% or 18% on the freight charged by the transport agency?
Thanks
Dear Sir, I have paid GST on transport charges for July and Aug.In GSTR-2 wherein which I have to show transport charges and GST paid? I am registered dealer still RCM on transport charges is applicable or stopped till 31.3.2018.
You have to show the details of transport charges and GST paid under RCM in (Inward supplies received from registered person including reverse charge supplies) column under GSTR 2. The RCM provision for purchase from an unregistered dealer of more than Rs. 5000 has been postponed till 31.3.2018.