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.
We are Gujarat based Pvt Ltd Co. and we receive Taxable Goods by Unregistered person (GTA) of Uttar Pradesh who lives in Gujarat. Goods are picked-up from Gujarat and Supplied within Gujarat.
In such case, whether RCM applied as I GST or C / S GST…? (As just PAN card address is inter-state)
In case of the unregistered person, PAN address is considered so IGST is taken as RCM
Hello Sir,
I am a horticulturist and being a technical person RCM concept is very new to me. I have one query. we are taking services of some foreign experts and have a contracted value of say ‘X ‘ amount. we are deducting the GST from this contracted amount. but regarding RCM I want to confirm that will the RCM amount has to be deducted from the contracted value of will this amount will be over the contracted value and has to be paid by the receiver only? please clarify
You need to see your contract with a foreign consultant who is liable to pay Indirect Taxes in India. Is your payment is Gross payment including taxes then you can deduct the RCM under GST. Gross up the amount see below example:
Contract Price: 100 ( Inclusive of all Taxes)
You need to pay to foreign consultant = Rs. 84.75 (100/118*100)
You also need to deduct payment under section 195 of the Income Tax Act.
If your contract is indirect taxes will be paid as extra then you need to pay Rs. 100. Further, you need to deduct payment under section 195 of the Income Tax Act.
RCM under GST, First you need to take legal opinion is your services are covered under exemption then you don’t need to pay GST under RCM.
RCM on transport depends upon transportation service like pick up to drop location or Billing address of the transport company? please advice
Pick up the Drop location
I am from Kerala and my enterprise is registered under GST. I bought some material for trading from Vadodara. It was transported through the GTA namely ARC..Inthe GC, it is mentioned that I must pay GST under RCM.
I understand that the GST rate payable is 5%IGST if I don’t want to avail ITC. Otherwise, pay full IGST @12% and avail full ITC. Is my understanding correct?.
Correct
I have made payments through RCM for January 2018 and June 2018 and further no outward supply was made. can I claim a refund of the amount paid? If yes, then within what time?
Sir, First you have to show Inward supplies under RCM in GSTR 3B in Table 3.1 d & and the same ITC you can claim in Table 4 point no. 3, but you have to pay in cash the same ITC amount
Sir,
I am planning to start a proprietorship for providing consultancy services. I am based in Bangalore but my business will be interstate. I don’t expect it to exceed Rs. 20 Lakhs in the first few years. My questions are (a) do I need to register under GST? (b) Will my clients require to deduct GST under RCM, if they are unregistered under GST and (c) if I need to register, can I go for the composition scheme. Thanks in advance for your advice.
Your business will be required to register under GST even if your T/O is below 20 lakhs. An unregistered client does not require to decduct GST under RCM. No, you can not opt for composition scheme as you deal in an interstate transaction.
Hi Sir,
Can we avail ITC on GST paid under RCM from Registered service provider(GTA)?
YES
Hello Sir,
We have received the goods from Maharashtra to Karnataka through Transporter.we have paid the freight charges to the transporter. Also, we have pay GST under RCM. How do calculate the GST amount like CGST+SGST or IGST?
It is calculated through IGST.
Hi
Can you please clarify,
My question is RCM on GTA Recipient of Services
We are paying tax under RCM on GTA @ 5%, are we eligible to claim the input tax credit?
Yes, you are eligible to avail ITC paid under RCM on GTA service after payment of tax, if the input service (GTA) is used in providing taxable supply.
When GST under RCM on GTA is paid @ 5%, ITC should not be availed as that rate is subject to such condition. Please provide the basis for the availing of ITC.
“Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that:-
(a) credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and
(b) Credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if the supply of such service is an exempt supply and attracts provisions of sub-section”
Please see reply to Question No.10 in Sectorial FAQ’s on Transport and Logistics under MY GST in the Home page of CBIC.
A Hsg Socy is taking service from a security agency to supply guards @ Rs 10,000/- per month. Whether the Socy has to get registered under RCM and if so, how to go about it.
If housing society wants to claim ITC which is paid by them by way of RCM then only It needs to get registered otherwise not
Whether Waste Oil (HSN-2710) procured from an unregistered person will be covered under RCM u/s 9(4) of the CGST Act?
“Please Contact to GST Practitioner”
I am a registered Person under GST and doing business of freight forwarding. So For clearance of Shipment i availed service of Transport and Paid this amount by Cheque. I had charged transportation expenses from our Client with Gst. I want to know I have to pay GST under Reverse also or not?? because I had paid GST on the Service invoice in which transportation is also included.
Sir
I think for the recipient of GTA service, the GST rate is 5% irrespective of GTA is registered or unregistered. Please clarify.
“If the GTA is also unregistered, there will be no tax liability on the GTA or the recipient. In such cases, where a registered GTA is liable to pay tax @ 5% on transportation service, 2 options have been given to the GTA: Pay tax @ 5% with no input tax credit. Pay tax @ 12% with full input tax credit.”
one of my clients doing business in paper scrap which is taxable. all purchase made from unregistered person, can he is liable to pay tax on RCM basis
Yes
We pay RCM MONTH AUG-2017 RS.28302+28302 IN AUG-2017 GSTR3B RETURN. AND SEPT-2017 RCM 44569+44569 NOT PAY TILL DATE BUT IN OCT GSTR3B WE CLAIM ITC 44569+44569 SOTHAT TODAY GST ANNUAL RETURN QUARY OUR CA PAID 44569+44569 BUT 28302+28302 NOT REFUND GST GOVERNMENT IT IS POSSIBLE
ITC of 28302+28302 can not be availed because the time to take the same has lapsed now.
My client is a Manufacturing Company and manufactures both Taxable and exempted Goods. If the company pays GST under the RCM mechanism. Please advise whether ITC can be claimed on the total or in proportional to the sale of taxable and exempted goods
ITC can be claimed in proportional to the sale of taxable and exempted goods
thank you very much for the prompt reply
As per the Notification regarding CGST exemption from reverse charge up to Rs.5000 per day, it has been given that This notification shall come into force with effect from the 1st day of July 2017.
Refer – Notification No. 8/2017-Central Tax (Rate) New Delhi, the 28th June 2017
So, RCM on unregistered purchases will be not applicable even till 13/10/2017…
Portal had extended the RCM transaction on GST portal that’s why it was not applicable till 13th October 2017.
Dear sir
There is an RCM Liability on Ocean Freight, But we have taken 100% CIF value & calculate 5% RCM on & also ITC took. But actually, for calculation of RCM under Ocean freight, we should take @ 10% of CIF. Now We need to do any rectification or not as whatever paid is 100% avail.
We have file GSTR-3B return without RCM, Now We have come to know that we have to pay RCM on Transport Service which we don’t know. now the question is we want to pay RCM in Annual Return, can we paid it in DRC-03, and how we claim credit for the same the amount is of RCM nearly Rs. 1100000 to 12 lacs in Annual Return.
Yes, you can pay tax in Annual Return/DRC-03.
PLEASE INFORM IN ABOVE CASE REVERSE TAX PAID WITH INTEREST. IF YES PERCENTAGE OF INTEREST. PL. ALSO CLEAR THAT IF PAYMENT MADE THROUGH DRC-03, ITC CAN claim OF REVERSE CHARGE AND WHEN?
PL. INFORM. THIS MATTER IS MOST IMPORTANT
Interest rate is 18%. You can make payment in DRC 03 but you can not claim ITC through DRC 03. For more details please contact practicing CA.
I TAKE GTA SERVICE. I PAY GST UNDER RCM. WHAT TAX RATE APPLICABLE IF I WANT ITC
if GTA Charges 12%, GTA must deposit tax and ITC can be availed Or
if GTA Charges 5%, RCM applies and recipient must deposit tax and ITC cannot be availed
Dear sir,
if GTA Charges 12%, GTA must deposit tax and ITC can be availed Or
if GTA Charges 5%, RCM applies and recipient must deposit tax and ITC cannot be availed.
At what rate, RCM should be paid?
RCM applies at the higher tax rate
Can one single invoice contain many line items some of which are under RCM?
If we have taken a truck from a GTA (1st) and Our Company is also a GTA (2nd) for a movement from Rajasthan to Gujarat. We are asking the bill from the 1st GTA will have reverse charges as No. As we had our Bilti/LR/Consignment note for the movement.
My finance person is admitting that the 1st GTA should give the bill without GST and Reverse charges as “No” and the 1st GTA is saying it is not possible.
What is the solution?
Hello sir,
Please resolve my query:-
If RCM for the month of Sept 2019 is paid while filing GSTR 3B on 19.10.2019 can we claim ITC for such RCM Paid even in the return of Sept 2019 filled on 20.10.2019 or in the next month return i.e. OCT 2019 GSTR 3B return filled on 20.11.2019
You can claim ITC in the month of Oct.
if there is a registered under GST taking of a service from an unregistered vendor(individual) for Cab hired on monthly basis weather there is GST applicable or not.
My company GST Register in Kolhapur(Maharashtra) purchase Scrap from Delhi & despatch to Gujrat by direct Scrap is not received in Kolhapur (Maharashtra). Bill is made on my name at Kolhapur address & GTA Registered office in Mumbai. Freight paid by me. What can I pay IGST, CGST +SGST through RCM?
Do RCM under GST Applicable for labour charges or hired labour?
In case the outside hired labour are unregistered users, then the supplier of service will have to pay GST on reverse charges on the hired charges paid to the labour.
In case the outside hired labour are procured from registered agencies, then no reverse charge will be applicable. The supplier has to acquire labour from registered agencies on payment of GST.
Hi,
I paid Rs.500 under RCM. Can I claim Full 500 (Taxable & Exempted Portion) or Taxable portion alone.
I paid the tax instead of supplier i.e. Railway under RCM in JUNE 19. How should I claim it as ITC & in which month. Please detail it.
in that month where you pay the tax to govt. (which is June)
Composite dealer purchases from unregistered dealer above 5 thousand RCM applicable. GST registered dealer salaries, freight charges, bank charges, rent paid business. All expenses RCM applicable.
As per the recent amendments in Feb 2019, RCM on purchase from an unregistered dealer has been postponed till 30th Sep 2019.
I have received a labour contractor bill without GST. I make the GST for the same, how do take input for the same bill
After payment of GST on RCM basis, you can claim ITC for the same in GSTR-3B.
but sir,
In “Liability due to receipt of reverse charge supplies” column there an excess (3b-2a (bcz of other dealer is unregistered) so this statement remains the same or any mistake?
Section 9(4) of CGST / SGST (UTGST) Act, 2017 / section 5(4) of IGST Act, 2017 provides that If an unregistered person supply taxable goods or services or both to a registered person then the registered person shall be liable to pay tax under reverse charge basis as recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Whether registered person availing services (not for the furtherance of business ) from unregistered person shall be liable to pay tax under RCM? ex. security charges paid for the bungalow of the proprietor (individual) which is used for the personal purpose and such expense is debited to the capital account.
I am a registered dealer in Kolkata. Received goods from Delhi from a transporter. The transporter is having an office in both Kolkata and Delhi and unregistered in both states. Address in bilty of the transporter is their head office Mumbai. so in what head I have to pay rcm? IGST or CGST-SGST?
If a transporter is registered in goods receiving state or not registered under GST then CGST and SGST would be payable otherwise IGST will be applicable.
Hi,
I want to know that, Is RCM Paid by Rent a Cab Operator can claim as Input.
We paid the freight charge to the transporter and also charged some amount in customer invoice. My question is which amount is liable for GST under RCM. Full freight amount to be paid to the transporter or freight amount after less charged in the invoice.
Please help with this. Thanks and Regards
RCM would be leviable on the transaction value charged for transportation services.
Hello. I have a query on security services. Suppose a Service provider provides his services to both RD and URD. For supplies to RD, he is not liable for GST as he falls under RCM, How will he raise an invoice for such services to RD? Regards,
In that case, you need not mention tax amount in invoice and also need to mention that supply is covered under RCM.
CAN I COLLECT INPUT TAX CREDIT ON SECURITY SERVICES AFTER PAYING THE TAX AMOUNT ON GOVT.?
Yes after paying tax on RCM basis, you can claim ITC.
Hello,
We are a private limited company. We have availed legal consultancy which attracts RCM in 2018-19. Company registered itself under GST in April 2019. Can we pay GST under RCM now with interest under the GST Registration Number received in April 2019? How about the filing of return?
YOU HAVE TO OBTAIN REGISTRATION BEFORE AVAILING SERVICE WHICH ATTRACTS RCM LIABILITY. YOU CANNOT FILE A RETURN FOR THE PERIOD PRIOR TO THE DATE OF REGISTRATION.
I have two conditions:
1) I pad to Transporter of Rs 2000/-, transporter issued a proper document.
2) I pad to Auto Riksha of Rs 2000/-, there is no proper documentation for expenses booking.
Both transaction, I booked in Freight Expenses.
Is there any RCM liability, If Yes, on what amount.
Regards,
Pradeep
I have a question on RCM.
I am a tour operator and I have supplied a tour package to my client which includes transportation, accommodation and food. I have paid GST on my total sale price @5 %. The hotels have provided me with GST invoices, but the transportation provider is not registered under GST. Now:
1- Am I liable to pay tax on the payment done to transportation provider under RCM?
2- What will be the GST rate applicable for such a transaction?
3- Am I eligible for GST input credit on the above transaction on the tax paid under RCM?
Will be looking forward to your suggestions.
Best Regards
1. If the transporter is a GTA, then you need to pay tax under RCM.
2. GST will be payable at the rate of 5% without taking ITC.
3. You first need to pay RCM liability and then can utilise that as your ITC.
For Reverse charge, Transporation of Goods and not of human being, hence a Tour operator charging for transportation of passengers and not Goods, in such case no need to pay GST unless you Trasport Goods, you are providing Conveyance local and Bus for long distance for passengers hence no Reverse charge applicable, for Goods Transportation 5% is rate.
I HAVE A QUERY FOR FREIGHT PAYMENT UNDER REVERSE CHARGE MECHANISM – If we have sold goods IGST OR LOCAL and freight not added in Invoice but directly paid to the transporter on behalf of the purchaser. Should we have to pay RCM and can we claim ITC on that freight payment ??? Please give your kind advice …..
RCM ITC adjusted to RCM tax Only or take RCM ITC to All other ITC
It also can be adjusted against normal tax liability.
sir, My question is I have paid RCM sep-2017 but I have not taken credit in Oct-2017, now I can take this credit in March-19 3B Return? yes or no.
Yes, as per recent amendments you can claim ITC till due date for Mar 2019 return.
1. GTA not giving any invoice they are giving only consignment note than would we have to pay RCM?
2. the consignment note we receive the GST mention our state but we purchase goods from other states what should we pay SGST and CGST or IGST?
Do we even have to RCM on purchased autoresponder services such as Aweber, Trafficwave, etc?
If yes, can we claim ITC on such purchases?