Reverse Charge Mechanism

Lease of Land and issues in GST?

Goods and Services Tax - Article contains Important Definitions related to Lease of Land and issues in GST, Schedule entries related to  Lease of Land, Reverse Charge Mechanism on Land Lease, Important Judgement and AAR related to GST on Land Lease with FAQ on Issues like: What is the difference between the lease of Land v/s Building?, What is a […]...

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Fundamental of reverse charge under GST

Goods and Services Tax - Meaning of reverse charge:  As per Section 2(98) of the CGST Act ‘reverse charge’ means the liability to pay tax by the recipient of supply of services  or goods instead of supplier of such services or goods under sub-section (3) or sub-section (4) or under sub-section (3) or sub-section (4) of section 5 of IGST […]...

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Eligibility of ITC under RCM Even after expiry of Time Limit

Goods and Services Tax - Eligibility of Input Tax Credit (ITC) under RCM on supply received from unregistered persons Even after Expiry of Time Limit Specified in Section 16(4):- There is a lot of confusion around sec 16(4) and there are many taxpayers who are suffering from lapses of ITC due provision of Sec 16(4) especially in the case of […]...

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Common errors that a registered person must avoid while submitting GST return

Goods and Services Tax - Even after 3 years of introduction of GST Act, people registered under GST are making many errors while filing their GST returns. It is very important to file GST returns with the most accuracy to avoid litigation from the department. A wrong filing in GST return can impose a huge amount of penalty and interest […]...

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Will Remuneration To Directors Attract GST Under RCM?

Goods and Services Tax - WILL THE REMUNERATION PAID BY A COMPANY TO ITS DIRECORS ATTRACT GST UNDER THE REVERSE CHARGE MECHANISM? 1. PECULIAR LEGAL FICTION IN THE GST LAW This was there in the erstwhile Service Tax Regime also. The Principle is simple—“If you are unable to tax a category of persons who supply the services, call the poor […]...

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CBIC issues 43 notifications on 30th September 2019

Goods and Services Tax - CBIC issues 43 notifications on 30th September 2019 to give effect to Recommendations made by GST Council in its 37th Meeting. Most of the changes are effective from 1st October 2019 and includes changes in Custom Law, CGST, IGST and UTGST Law. Changes includes changes in Rates on certain Products and Services, Applicability of Reverse [&...

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Implement workable reverse charge mechanism in Phases: ICAI

Goods and Services Tax - ICAI has submitted that the provisions for levy of taxes under the reverse charge mechanism applicable to a registered person, effecting an inward supply from an unregistered person, can be implemented in a phased manner and it also suggested that GST Council / Government may consider amending the law and enhance the knowledge of stakehol...

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GST under RCM on salary to Directors- AAR allowed application withdrawal

In re Man Structurals (P) Ltd. (GST AAR Rajasthan) - In re Man Structurals (P) Ltd. (GST AAR Rajasthan) Whether GST is payable under Reverse Charge Mechanism (RCM) the salary paid to Directors of the company who is paid salary as per employment contract? We observe that Shri Madhu Sudan Sharma, authorized representative of the applicant, submitted a l...

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Services rendered by GTA liable to GST under RCM: Consignment note not must

In re Uttarakhand Forest Development Corporation (GST AAR Uttarakhand) - In re Uttarakhand Forest Development Corporation (GST AAR Uttarakhand) As per the provisions of section 9(3) of Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge...

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IGST paid under RCM eligible for ITC

In re Fom Aluminium Machines Pvt. Ltd. (GST AAR Karnataka) - In re Fom Aluminium Machines Pvt. Ltd. (GST AAR Karnataka) The third question which reads as ‘Is IGST paid under RCM eligible for ITC?’ The levy of IGST is only on the inter-state supplies and importation of goods/services is treated as inter-state supply, in terms of Section 7(2)/7(4) o...

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Cenvat Credit can be utilised for payment of Service Tax on reverse charge basis

Sahara India TV Network Vs C.C.G.ST. (CESTAT Mumbai) - The issue to be decided is Whether the Appellant i.e. the service recipient could utilize Cenvat credit of Central Excise duty paid on inputs, for payment of service tax on services viz.Management, Maintenance or Repair, Copyright and Advertising, received by them from abroad, under reverse charge m...

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Remuneration to director attracts GST under RCM

In re Clay Crafts India Pvt. Ltd. (GST AAR Rajasthan) - In re Clay Crafts India Pvt. Ltd. (GST AAR Rajasthan) Clay Craft India Pvt Ltd has filed an application before the Rajasthan bench of the AAR to sought clarification on  Whether GST is payable under Reverse Charge Mechanism (RCM) the salary paid to Director of the company who is paid salary as per ...

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GST paid under Reverse charge is eligible for certification

File No. REV03-14023/3/2018-AC - ENFT - CCT - (27/08/2020) - Andhra Pradesh: Clarification on whether the eligibility of tax paid under Reverse charge, under GST is eligible for certification of payment of Tax for the purpose of reimbursement under Industrial Investment Promotion Policy, 2015-20....

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UTGST: RCM on renting of motor vehides – req

Notification No. 29/2019-Union Territory Tax (Rate) [G.S.R. 975(E).] - (31/12/2019) - Notification No. 29/2019-Union Territory Tax (Rate)- To amend notification No. 13/ 2017- Union Territory Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019. Government of India Ministry of Finance (Dep...

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Reverse Charge Mechanism (RCM) on renting of motor vehides – req

Circular No. 130/49/2019-GST - (31/12/2019) - Suppliers of service by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient have an option to pay GST either at 5% with limited ITC (of input services in the same line of business) or 12% with ful...

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IGST: New service under reverse charge mechanism

Notification No. 28/2019-Integrated Tax (Rate) [G.S.R. 973(E)] - (31/12/2019) - Notification No. 28/2019-Integrated Tax (Rate)– To amend notification No. 10/2017-Integrated Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019. Government of India Ministry of Finance (Departmen...

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New service under reverse charge mechanism | 38th GST Council meeting

Notification No. 29/2019- Central Tax (Rate) [G.S.R. 971(E).] - (31/12/2019) - Notification No. 29/2019-Central Tax (Rate)- To amend notification No. 13/2017- Central Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019. Government of India Ministry of Finance (Department of Revenu...

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Recent Posts in "Reverse Charge Mechanism"

Lease of Land and issues in GST?

Article contains Important Definitions related to Lease of Land and issues in GST, Schedule entries related to  Lease of Land, Reverse Charge Mechanism on Land Lease, Important Judgement and AAR related to GST on Land Lease with FAQ on Issues like: What is the difference between the lease of Land v/s Building?, What is a […]...

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Fundamental of reverse charge under GST

Meaning of reverse charge:  As per Section 2(98) of the CGST Act ‘reverse charge’ means the liability to pay tax by the recipient of supply of services  or goods instead of supplier of such services or goods under sub-section (3) or sub-section (4) or under sub-section (3) or sub-section (4) of section 5 of IGST […]...

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Eligibility of ITC under RCM Even after expiry of Time Limit

Eligibility of Input Tax Credit (ITC) under RCM on supply received from unregistered persons Even after Expiry of Time Limit Specified in Section 16(4):- There is a lot of confusion around sec 16(4) and there are many taxpayers who are suffering from lapses of ITC due provision of Sec 16(4) especially in the case of […]...

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Common errors that a registered person must avoid while submitting GST return

Even after 3 years of introduction of GST Act, people registered under GST are making many errors while filing their GST returns. It is very important to file GST returns with the most accuracy to avoid litigation from the department. A wrong filing in GST return can impose a huge amount of penalty and interest […]...

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Will Remuneration To Directors Attract GST Under RCM?

WILL THE REMUNERATION PAID BY A COMPANY TO ITS DIRECORS ATTRACT GST UNDER THE REVERSE CHARGE MECHANISM? 1. PECULIAR LEGAL FICTION IN THE GST LAW This was there in the erstwhile Service Tax Regime also. The Principle is simple—“If you are unable to tax a category of persons who supply the services, call the poor […]...

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GST paid under Reverse charge is eligible for certification

File No. REV03-14023/3/2018-AC - ENFT - CCT (27/08/2020)

Andhra Pradesh: Clarification on whether the eligibility of tax paid under Reverse charge, under GST is eligible for certification of payment of Tax for the purpose of reimbursement under Industrial Investment Promotion Policy, 2015-20....

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Liability to pay taxes under RCM covered under Composition Scheme

A ‘Composition Scheme’ is an alternative method of levying tax designed for small taxpayers. If your business is small, but not quite small enough to be GST-exempt, you may be able to use your company’s aggregate turnover to qualify for the composition levy scheme. A simplified ‘Composition Scheme’ has been provided; vide Sect...

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4 important Videos on GST Credit & RCM liability

Videos on multiple topics of Outward supply and GST ITC for preparation & hand holding of GSTR 9/GSTR 9C for FY 2018-19.  These videos are very important for basic understanding of taxpayers, professionals, etc. Speaker in the all the Videos is Learned CA Bimal Jain. Videos are on following for Topics- 1. Reconciliation of GST [&hell...

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GST under RCM on salary to Directors- AAR allowed application withdrawal

In re Man Structurals (P) Ltd. (GST AAR Rajasthan)

In re Man Structurals (P) Ltd. (GST AAR Rajasthan) Whether GST is payable under Reverse Charge Mechanism (RCM) the salary paid to Directors of the company who is paid salary as per employment contract? We observe that Shri Madhu Sudan Sharma, authorized representative of the applicant, submitted a letter dated 29.06.2020 addressed to this...

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6 Case Studies on RCM reporting in GSTR-9 & 9C of FY 2018-19

Part III  of GST Audit Series: 6 Case Studies on Reverse Charge Mechanism (RCM) reporting in GSTR-9 & 9C of FY 2018-19. Issues discussed regarding- 1. How to report 17-18 transactions of RCM paid in 18-19? 2. RCM paid by DRC 03, how to report? 3. How to report RCM issues in GSTR 9 and […]...

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GST rate on GTA Services under RCM – 12% or 5%?

In accordance with Notification No. 11/2017- Central Tax (Rate) dated 28th June, 2017, GST under Reverse Charge Mechanism is payable on supply of services by a goods transport agency (GTA) in respect of transportation of goods by road to- -any factory registered under or governed by the Factories Act, 1948(63 of 1948);or -any society regi...

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Reverse Charge Mechanism- Section 9(4) -GST Act, 2017

Reverse Charge Mechanism (RCM) under Section 9(4) of the CGST Act, 2017 and recent Notification No. 07/2019- Central Tax (Rate) dated 29th March 2019 effective from 1st April, 2019 The provision that has gathered maximum attention for its ability to create significant stress and nuisance would clearly be Section 9(4) of the Central Goods ...

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RCM on purchases made from Unregistered Dealer under GST

Reverse Charge Mechanism (RCM) on purchases made from Unregistered Dealer under GST As per Section 9(4) of CGST Act, 2017 and Section 5(4) of IGST Act, 2017 any Supply of goods or service from an Unregistered supplier to a Registered supplier will cast liability to Pay GST to the Government in the form of RCM i.e. […]...

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RCM for purchase of input goods & services used in Construction of Project from Unregistered Person

Reverse Charge Mechanism (RCM) for purchase of input goods and services used in Construction of Project from the Unregistered Person [Notification No. 07/2019- Central Tax (Rate) dated 29th March 2019 effective from 1st April, 2019]. After a long gap, the Central Government has used its power provided under amended Section 9(4) of the CGS...

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ITC reversal for GST payable under RCM

Section 17(3) of the CGST Act requires reversal of input tax credit where input and input service is used for making exempt supplies. As per section 17(3) of CGST Act, the value of exempt supply shall include Supply where GST is payable on reverse charge basis – The supplier need to reverse input tax credit as he is not liable to pay t...

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GST-RCM (Reverse Chage Mechanism) updated comprehensive list

IN GST regime, under RCM (Reverse charge mechanism), for supply of following services as in the table below has been notified, the GST payment of which is on the recipient of services, instead of supplier of service. For ease of understanding, updated comprehensive list is appended with notifications for amendment/insertion:- S.No. Catego...

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Reverse Charge Mechanism (‘RCM’) in case of purchase from unregistered supplier

The provision that has gathered maximum attention for its ability to create significant stress and nuisance would clearly be Section 9(4) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’). Before we go to that, we should understand Reverse Charge Mechanism. Reverse Charge Mechanism (RCM). Normally, the supplier of goods or ...

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Advance Ruling | Reverse Charge Mechanism | Section 9(3) | CGST Act 2017

Whether the applicant/importer is again required to pay IGST on the component of ocean freight under RCM mechanism on deemed amount which will amount double taxation of IGST on the deemed component of ocean freight of the imported goods?...

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Reverse Charge Mechanism on Goods & Services under GST

Generally, the supplier of goods or services is liable to pay GST. However, in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Reverse Charge means liability to pay the tax is on the person receiving goods/services instead of the person supplying the ...

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Reverse Charge Under (RCM) GST – Insights

Reverse charge means the liability to pay tax by the recipient of 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 sub-section (4) of section 5 of the Integrated Goods and Services Tax Act....

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How to Pay RCM In Real Estate for Purchase from Unregistered Suppliers

How to pay RCM by a Real Estate Promoter or developer on the shortfall in procurement from Registered Persons? Notification 03/2019 Central Tax (Rate)  dated 29th March 2019 brought in yet another major change which had a huge impact on the real estate sector. Though the buyers of the flat saw this as a huge […]...

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Weather rule 42 is to be applied while availing ITC of the tax paid under RCM

Rule 42 is considered as a one of the most complex concept in a GST. Rule 42 of the CGST Rules, 2017 envisages about the ‘manner of determination of input tax credit in respect of input and input service’. Before coming to the topic let’s take a brief of the roots. Section 17(1) of the […]...

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Reverse Charge Mechanism in Goods and Services Tax

◊ BACKGROUND OF REVERSE CHARGE MECHANISM ♦ Reverse Charge Mechanism was first introduced in Service Tax Law. ♦ Now, the Government has incorporated RCM in GST. ♦ Government has notified not only supply of certain services but also supply of certain goods under RCM. ◊ OBJECTIVE OF REVERSE CHARGE MECHANISM ♦ Safeguard the intere...

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Services rendered by GTA liable to GST under RCM: Consignment note not must

In re Uttarakhand Forest Development Corporation (GST AAR Uttarakhand)

In re Uttarakhand Forest Development Corporation (GST AAR Uttarakhand) As per the provisions of section 9(3) of Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such [&hellip...

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RCM Liability on Government Services

Under GST Law, Section 9 of the CGST Act, 2017 and Section 5 of the IGST Act, 2017 empowers the Central Government to notify such goods and services on supply of which the recipient shall be liable to pay applicable GST under the Reverse Charge Mechanism....

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Decoding Clarification on levy of GST on Director’s remuneration

Decoding – CBIC Circular No: 140/10/2020 – GST dt. 10.06.2020 – Clarification in respect of levy of GST on Director’s remuneration Point of Doubt: – Whether the remuneration paid by companies to their directors 1. falls under the ambit of entry in Schedule III of the Central Goods and Services Tax Act, 2017 (hereinaf...

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GST on Director’s Remuneration – To Levy or Not?

There has been a lot of confusion on taxability of director’s remuneration from companies in which they are directors in different forms. The confusion or doubts got mounted in the wake of recent conflicting advance rulings. CBIC has now come out with a detailed Circular No. 140/10/2020-GST dated 10.06.2020 which clarifies issues relati...

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FAQs on GST liability on Director of Company

What is an important test to determine whether GST is leviable on services provided by directors? How are services provided by a managing director to a body corporate covered under GST?...

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GST RCM on Director’s Remuneration

Goods and Services Tax Act (‘GST’) was introduced in India from July 1, 2017 and is a single unified tax created by amalgamating provisions from erstwhile taxes like VAT, Service Tax, Excise etc. One of the legacy provisions which is included under GST from Service Tax is the concept of Reverse Charge mechanism (‘RCM’) wherein [&h...

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Applicability of RCM on Director Remuneration -Version 3

There has been a big controversy regarding the liability of GST on Directors Remuneration under Reverse Charge. Various conflicting Advance Rulings has been issued by Authority for Advance....

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Discussion on Reverse Charge under GST Regime with FAQs

What is reverse charge  Sec.2(98) of CGST Act  : Normally, the supplier of goods or services pays the tax on supply but in the case of Reverse Charge, the receiver becomes liable to pay the tax, i.e., the chargeability gets reversed. As per Section 9 (3) or (4) of the CGST Act 2017 or Section […]...

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Reverse charge (RCM) on renting of Motor Vehicle

Introduction: RCM on rent of Motor Vehicle was notified w.e.f. 01/10/2019 through notification no. 22/2019 CGST(rate) dated 30-09-2019. Later due to some confusions amendments and clarifications are introduced on 31/12/2019 through Notification No. 29/2019- CGST(Rate) and Circular No. 130/2019. Detailed study of the topic is as follows: D...

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Time limit for claiming credit of GST paid under reverse charge

Section 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), provides the time limit for claiming credit under GST. As per the said section, a registered person can claim credit pertaining to an invoice or a debit note for supply of goods and services earlier of: 1. Due Date of furnishing […]...

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Constitutional validity of Reverse Charge Mechanism under GST

Earlier, the reverse charge concept was only there in Service Tax and was applicable to only services and not for goods. Under GST Law, Government have notified certain services and goods, on which GST is payable on the reverse charge basis....

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RCM under GST on Renting of Motor Vehicle

The government introduced reverse charge on services of renting of motor vehicle vide Notification No.-22/2019- Central Tax (Rate) dated 30.09.2019 which was later on amended through Notification No.-29/2019-Central Tax (Rate) dated 31.12.2019....

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Reverse charge Mechanism (RCM) in GST- Goods & Services

In this article I am going to discuss the following issues regarding RCM under GST- Introduction of RCM, Need and purpose of RCM under GST, Statutory provisions relating to GST, Notification issued by the government regarding RCM under GST, Goods and services notified in RCM and Some important/recent decisions on RCM by the various author...

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GST Reverse Charge Mechanism chart on Goods & Services

Section 9(3): U/S 2(98) of CGST Act Reverse charge is defined as “liability to pay tax by the recipient of 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 sub-section (4) of […]...

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All About Reverse Charge Mechanisms In GST Law

In Goods and Service Tax there are Two methods to Collect Taxes that is Forward Charge Mechanisms and Reverse Charge Mechanisms. In Every Law passed by the Government to collects taxes, it has to introduce two type of Power to Collect Tax that is Levy of Tax (which is Section 9 of CGST Act, 2017 […]...

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Reverse Charge Mechanism (RCM) Under GST Regime

In the GST regime, An Entity or Supplier is required to be registered either mandatorily under cretin circumstances (say, crossing threshold limit – 40L/20L; involved in specified business’s) or on voluntary basis. However there are certain suppliers,not registered due to illiteracy (say, local good transporters) or they are situated ...

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Reverse Charge Mechanism (RCM) List under GST

Reverse Charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply. There are two type of reverse charge scenarios provided in law. First is dependent on the nature of supply and/or nature […]...

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Payment voucher & Invoice under RCM in CGST Act 2017

U/s 31(3) (e) & (f) of GST Act, 2017- says if you are paying tax under RCM (reverse charge mechanism) u/s 9(3) or (4) then you have to issue an Invoice u/s 31(3) (e) and payment voucher U/s 31(3)(f) – Be conscious in case of payments made to Advocates, Passenger Vehicles, GTA, Arbitral Tribunal, Goods […]...

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Reverse Charge Mechanism (RCM) in Goods and Services Tax (GST)

Reverse Charge Mechanism (RCM) in Goods and Services Tax (GST) The concept of Reverse Charge Mechanism in Good and Services Tax has the same concept as it was in erstwhile Services Tax Act, except some changes are like Applicability on different tax payers, Compliance and its applicablity on some of the Goods as notified by […]...

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Promoter’s Liability under Reverse Charge Mechanism (RCM)

The Central Government vide Notification No. 07/2019 -CT( RATE) dated 29.03.2019 specified that the promoters are required to pay tax under Reverse Charge Mechanism ( RCM ) in respect of shortfall from the minimum value of goods or services or both required to be purchased for construction of project. Minimum value for the purpose is [&he...

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Accounting Treatment of Reverse Charge Mechanism (RCM) under GST

Concept of RCM is not new in Indirect Tax regime, it is similar to what was there in service tax, but in GST regime supply of goods is also covered under RCM. There is not any provision of partial RCM under GST, 100% need to be paid by receiver of service or Goods....

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Is GST payable under RCM on Director’s Remuneration or not?

Arjuna, the confusion of whether GST is payable under RCM on Director’s remuneration has raised due to the recent order passed by Authority of Advance Ruling (AAR) of Rajasthan in the case of Clay Craft India Pvt Ltd, & AAR of Karnataka in the case of Alcon Consulting Engineers (India) Pvt Ltd. These advance rulings state that remunerat...

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List of Services on which GST is payable under RCM -Updated till 31/03/2020

Notified Categories of services on which GST will be payable under Reverse Charge Mechanism (RCM)- Updated list till 31/03/2020...

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Critique of The AAR Ruling on Directors Remuneration

RAJASTHAN AAR RULING IN THE MATTER OF CLAY CRAFT INDIA PVT LIMITED – REGARDING TAXABILITY OF REMUNERATION PAID TO DIRECTORS UNDER REVERSE CHARGE MECHANISM – REF NO. RAJ/AAR/2019-20/33 dated 20.2.2020 Till now the interpretation done by all was that if the Director is an employee of the Company and being paid remuneration, then the ser...

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Is GST under RCM applicable on remuneration paid to Directors?

As per Entry 6 of Notification 13/2017 dated June 28, 2017 provides for RCM implications on the services rendered by the director of a company or body corporate to the said company or body corporate thereby creating an onus on the company to pay taxes under RCM on the said services supplied by directors. As per this entry director remuner...

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GST under reverse charge on Director fees- Analysis of AAR Rajasthan ruling

Recently the Authority of Advance Ruling, Rajasthan in the case of Clay Craft India (P) Ltd has passed a ruling that consideration / fees paid to directors will attract Goods and Services Tax under reverse charge vide entry no 6 of notification no 13/2017 Central Tax (rate) dated 28-06-2017....

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RCM under GST on services of Directors

Section 7 of the CGST Act provides an inclusive definition of supply that includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course of furtherance of his business. […]...

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GST RCM on Import of Service including IPR

This article would help persons who have large number of foreign clients, persons who attend foreign business events held outside India, or have holding company outside India including procurement of services from outside India. Service sector plays an important role in technology diffusion especially in areas such as financial services, ...

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GST Under RCM on Renting of Motor Vehicle

The problem was arising for the small taxpayers who supposed to deposit the GST amount immediately on account of supply of service and the payment for the same has been received by them after 6 months or even more in some cases. It becomes very difficult for the small operators to pay the tax amount […]...

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RCM on Security Services under GST from 1st January 2019

GST on security services was applicable from 1st of July 2017 on forward charge but it has been brought under Reverse Charge Mechanism(RCM) from 1st January 2019 based on Notification No. 29/2018- Central Tax (Rate), dated 31st December, 2018...

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IGST paid under RCM eligible for ITC

In re Fom Aluminium Machines Pvt. Ltd. (GST AAR Karnataka)

In re Fom Aluminium Machines Pvt. Ltd. (GST AAR Karnataka) The third question which reads as ‘Is IGST paid under RCM eligible for ITC?’ The levy of IGST is only on the inter-state supplies and importation of goods/services is treated as inter-state supply, in terms of Section 7(2)/7(4) of the IGST Act 2017 respectively. The [&...

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List of goods and services under reverse charge as on 01/03/2020

Article provides List of goods and services under Reverse Charge Mechanism (RCM) under GST Regime as on 01/03/2020 alongwith date from which the same is under RCM. For Goods S. No. Particular Effective date 1. Cashew nuts, not shelled or peeled 01/07/2017 2. Bidi wrapper leaves (tendu) 01/07/2017 3. Tobacco leaves 01/07/2017 4. Silk yarn ...

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Cenvat Credit can be utilised for payment of Service Tax on reverse charge basis

Sahara India TV Network Vs C.C.G.ST. (CESTAT Mumbai)

The issue to be decided is Whether the Appellant i.e. the service recipient could utilize Cenvat credit of Central Excise duty paid on inputs, for payment of service tax on services viz.Management, Maintenance or Repair, Copyright and Advertising, received by them from abroad, under reverse charge mechanism?...

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All about Section 9(4) of CGST Act, 2017 (RCM)

Section 9(4) of CGST Act, 2017 As we all know Liability to Pay tax by a Recipient under Reverse Charge Mechanism is governed by Sections 9(3) and Section 9(4) of the Central Goods and Service Tax Act, 2017. At the very beginning Section 9(4) of The Central Goods and Services Tax Act, 2017 was : […]...

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Remuneration to director attracts GST under RCM

In re Clay Crafts India Pvt. Ltd. (GST AAR Rajasthan)

In re Clay Crafts India Pvt. Ltd. (GST AAR Rajasthan) Clay Craft India Pvt Ltd has filed an application before the Rajasthan bench of the AAR to sought clarification on  Whether GST is payable under Reverse Charge Mechanism (RCM) the salary paid to Director of the company who is paid salary as per contract and  […]...

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Is a person supplying only Exempt Goods liable to pay GST under Reverse Charge?

In order to get clarity regarding this concept we need to go through registration provisions under CGST Act. Section 22 of the CSGT Act (PERSON LIABLE FOR REGISTRATION) – It provides that every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where [&hell...

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RCM on renting of Motor Vehicle-Differently decoded (Amended as on 31 Dec 2019)

HIRING/RENTING OF MOTOR VEHICLE UNDER REVERSE CHARGE 9(3) 1. Recently a new Notification no 22/2019 dated 30th Sep 2019 was introduced wherein Renting of Motor vehicle was made taxable under Reverse charge. But not all is renting and not all is taxable under RCM. Lets us find out: 2. Notif no : 22/2019 CGST (rate) […]...

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RCM liability under service tax on freight charges

Nirmal Seeds Private Limited Vs The Commissioner of Central Excise (Bombay High Court)

It is the case of the Revenue that the appellant is reimbursing the freight amount to their consignees to the extent freight is paid by the consignee. Besides, it was also found that the appellant was also issuing credit notes for reimbursement of freight charges. Thus, the case of the Revenue is that the freight is ultimately paid by the...

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Reverse Charge Mechanism in GST Regime with Chart – Updated till date

The concept of reverse charge mechanism was introduced in erstwhile Service Tax laws. Generally, tax is payable by the person who provides Services but under reverse charge mechanism the liability to pay tax has shifted to recipient of Services. ...

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RCM on Renting of Motor Vehicle, confusion persists…

Basis recommendation by the GST council in its 37th meeting held on 20 September 2019, Central Board of Indirect Taxes and Customs (CBIC), had issued a notification to place supply of renting of motor vehicles under the gamut of reverse charge mechanism. The recommendation was specifically intended to cover only those supplies made by non...

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RCM under GST on Renting of Motor Vehicles

RCM on Renting of Motor Vehicles-- Services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient provided to a body corporate...

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RCM on Renting of Motor Vehicle : A Game Changer

On eve of New Year 2020 Government had again issued some new notifications. One of such notification issued is notification dealing with Renting of Motor Vehicle designed to carry passengers covered under Reverse Charge Mechanism (hereinafter referred as RCM). In Renting of Motor Vehicle designed to carry passengers, there are two options...

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Clarification on GST on Rent a Cab & Annual Return due date extension

Clarification on GST on Rent a Cab and Extension of due date for Annual Return for 2017-18 Considering the technical difficulty being faced by the taxpayers, the GST Council had decided to extend the due date for furnishing Annual Report for the year 2017-18 to 31st January 2020. CBIC has issued Order No 10/2019 – […]...

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UTGST: RCM on renting of motor vehides – req

Notification No. 29/2019-Union Territory Tax (Rate) [G.S.R. 975(E).] (31/12/2019)

Notification No. 29/2019-Union Territory Tax (Rate)- To amend notification No. 13/ 2017- Union Territory Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019. Government of India Ministry of Finance (Department of Revenue) New Delhi Notificati...

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Reverse Charge Mechanism (RCM) on renting of motor vehides – req

Circular No. 130/49/2019-GST (31/12/2019)

Suppliers of service by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient have an option to pay GST either at 5% with limited ITC (of input services in the same line of business) or 12% with full ITC....

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IGST: New service under reverse charge mechanism

Notification No. 28/2019-Integrated Tax (Rate) [G.S.R. 973(E)] (31/12/2019)

Notification No. 28/2019-Integrated Tax (Rate)– To amend notification No. 10/2017-Integrated Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019. Government of India Ministry of Finance (Department of Revenue) Notification No. 28/2019- ...

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New service under reverse charge mechanism | 38th GST Council meeting

Notification No. 29/2019- Central Tax (Rate) [G.S.R. 971(E).] (31/12/2019)

Notification No. 29/2019-Central Tax (Rate)- To amend notification No. 13/2017- Central Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019. Government of India Ministry of Finance (Department of Revenue) Notification No. 29/2019- Central Tax...

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Respected GST Law Makers- Please Listen And Solve

I have Listed some of the shortcomings which I feel while dealing with GST at ground level which need to be solved along with the need of simplification of the GST and request your good self to consider the same so the Indian Trade and Industry and professionals will give their full capacity cooperation for the betterment of the Economy o...

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RCM on Rent a Cab under GST

You may perhaps be aware that  the GST Council in its  meeting held on 20.09.2019 at Goa recommended that in the case of registered persons other than body corporate (e.g.  proprietorship, HUF or partnership firm) engaged in renting of vehicles and paying 5% GST (without availing ITC),  GST should  be paid by the  recipient  of [&h...

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Reconciliation of GST Input Credit with 2A report- Is RCM a solution?

Supplier has not filed GSTR 1. Except a nominal late fee, there is no penal action against the supplier for not filing the GSTR 1. There is lack of any incentive or compulsion to file GSTR 1 on time....

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Security Services under GST (RCM)

Security service is a service wherein a person supplies security personnel to another person for a consideration. Earlier in Service tax regime, security services provided by individual, HUF or partnership firm to a body corporate were covered under Reverse Charge Mechanism (RCM). However, with the enactment of GST Act, 2017 the concept ...

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Procedure for payment of RCM Liability under GST

Section 9(3) of the CGST Act states that the Government shall notify the supply of goods or services, the tax on which shall be paid under RCM. Vide Notification No. 13/2017 – CT (R) dated 28th June, 2017, the government has notified such services on which tax shall be paid under RCM. Now, Section 31(3)(f) […]...

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GST under reverse charge payable on Mining lease Charges paid to Govt.

In re JSW Steel Ltd. (GST AAR Karnataka)

The Applicant is liable to pay GST under reverse charge, for the payment made towards NMET and DMF, in light of Si. No. 5 of the Notification No. 13/2017- Central Tax (Rate) dated 28.06.2017....

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GST under RCM applicable on remuneration to Directors

In re M/s Alcon Consulting Engineers (India) Pvt. Ltd. (GST AAR Karnataka)

In re M/s Alcon Consulting Engineers (India) Pvt. Ltd. (GST AAR Karnataka) a) Whether the expenses incurred by the Staff members on behalf of the Company exceeding Rs.5000-00 a day and then reimbursed periodically are liable to tax  The amounts paid to the employees of the applicant company as reimbursement of expenses incurred by them [...

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Services of Author – Option to pay under Forward Charge

Notification No.22/2019-C.T (Rate) dated 30.09.2019 With respect to the services of transfer or permitting the use or enjoyment of a copyright relating to original literary works supplied by an author to a publisher, the author is given a choice to either pay the GST under forward charge, else the publisher located in India would be [&hel...

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Reverse Charge Mechanism Under GST on Goods and Services

Article explains What is Reverse Charge, Analysis of provisions stated under Section 9(3) and Section 9(4) of the CGST Act, Journey of Section 9 (4) of the CGST Act from 01-07-2017 to 31-01-2019, Input Tax Credit provisions in regard of Reverse Charge Mechanism, Set Off of Reverse Charge Liability, Time of Supply in the case […]...

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Services under Reverse Charge Mechanism in GST on 01.10.2019

List of Services liable for Reverse Charge Mechanism (RCM) in GST including notified services effective from 1st October, 2019. In the normal course of taxability in GST liability to pay GST is on supplier on supply of Goods or services but in some cases recipient of goods or services are liable to pay GST. The […]...

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CBIC issues 43 notifications on 30th September 2019

CBIC issues 43 notifications on 30th September 2019 to give effect to Recommendations made by GST Council in its 37th Meeting. Most of the changes are effective from 1st October 2019 and includes changes in Custom Law, CGST, IGST and UTGST Law. Changes includes changes in Rates on certain Products and Services, Applicability of Reverse [&...

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UTGST: Govt notifies certain services under RCM wef 01.10.2019

Notification No. 22/2019-Union Territory Tax (Rate) [G.S.R. 738(E).] (30/09/2019)

Seeks to amend notification No. 13/2017- Union Territory Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 37th meeting held on 20.09.2019 vide Notification No. 22/2019-Union Territory Tax (Rate) dated 30th September, 2019 Government of India Ministry of Finance (Departm...

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CGST: Govt amends entry related to GST on cement under RCM

Notification No. 24/2019-Central Tax (Rate) [G.S.R. 743(E).] (30/09/2019)

Seeks to amend notification No. 7/2019 – Central Tax (Rate), dated the 29th March, 2019 by amending the entry related to cement vide Notification No. 24/2019-Central Tax (Rate) dated 30th September, 2019. GST under RCM on purchase of cement by a promoter from an unregistered supplier Cement falling in chapter heading 2523 in the fir...

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CGST: Govt notifies certain services under RCM wef 01.10.2019

Notification No. 22/2019-Central Tax (Rate) [GSR 737(E).] (30/09/2019)

Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to notify services under reverse charge mechanism (RCM) as recommended by GST Council in its 37th meeting held on 20.09.2019 vide Notification No. 22/2019-Central Tax (Rate) dated 30th September, 2019. Additional services covered under Reverse Charge Mechanism (RCM) Nature ...

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IGST: CBIC amends entry related to GST on cement under RCM

Notification No. 23/2019- Integrated Tax (Rate) [G.S.R 742(E)] (30/09/2019)

CBIC amends notification No. 07/2019 – Integrated Tax (Rate), dated the 29th March, 2019 by amending the entry related to cement vide Notification No. 23/2019-Integrated Tax (Rate) dated 30th September, 2019. Government of India Ministry of Finance (Department of Revenue) Notification No. 23/2019- Integrated Tax (Rate) New Delhi, th...

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IGST: CBIC notifies certain services under RCM wef 01.10.2019

Notification No. 21/2019- Integrated Tax (Rate) [GSR 736(E)] (30/09/2019)

CBIC amends notification No. 10/2017- Integrated Tax (Rate) so as notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 37th meeting held on 20.09.2019 vide Notification No. 21/2019-Integrated Tax (Rate) dated 30th September, 2019. Government of India Ministry of Finance (Department of Revenue) ...

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IGST under RCM on ocean freight in case of CIF basis contract

M/s M. K. Agro Tech Pvt. Ltd. (GST AAR Karnataka)

M/s M. K. Agro Tech Pvt. Ltd. (GST AAR Karnataka) Whether under Reverse Charge Mechanism, IGST should be paid by the importer on ocean freight on the case of CIF basis contract? In the instant case, the importer in India is liable to pay the tax under RCM as they are deemed to be the […]...

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IGST payable under RCM on import of Service by Govt for business

In re M/s. Directorate of Skill Development (GST AAR Madhya Pradesh)

In re M/s. Directorate of Skill Development (GST AAR Madhya Pradesh) If the service is imported for the purpose of business or commerce even by the Govt then exemption would not be available and Govt need to pay GST under Reverse Charge. This can be further substantiated as per Q No 14 of GST Sectorial […]...

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Services covered under Reverse Charge Mechanism (RCM) under GST

Government published Notification No 13/2017-Central Tax (Rate) dated 28.06.2017 enumerating list of services on which recipient of services required to pay tax under reverse charge mechanism....

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GSTR 9- One Page Guide on Treatment of ITC, RCM & Outward Liability

The last date for filing of Annual return in FORM GSTR-9 for the FY 2017-18 is 31st August 2019 and many professionals facing lot of Confusion regarding Presentation purpose in different tables of GSTR 9 specially in case of transactions shown in GSTR 3B of 2018-19 which are pertaining to FY 2017-18. So  What will […]...

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GST on Ocean Freight under reverse charge mechanism: Legal View

Out of many controversial issues under GST, one of the most discussed issues is applicability of GST ocean freight under reverse charge mechanism (in case of goods imported on CIF basis).  Some of the professional are of the view that pay tax under reverse charge mechanism and take the credit of it.  However, it is […]...

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GST payable on mining lease Royalty Paid to State Govt under RCM

In re M/s Vinayak Stone Crusher (GST AAR Rajasthan)

In re M/s Vinayak Stone Crusher (GST AAR Rajasthan) a. The service provided by the State of Rajasthan to the applicant for which royalty is being paid is classifiable under 997337. b. The rate of GST on service provided by the State of Rajasthan to the applicant for which royalty is being paid is 18% (SGST […]...

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RCM on Goods Transport Agency (GTA) Services

A Quick Understanding on Reverse Charge Mechanism (RCM) on Goods Transport Agency (GTA) Services It has been more than a couple of years since GST was launched on 1st July 2017 but the organisations are yet to get settled down and adopt it with full clarity. Since the time GST was rolled out, there have […]...

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Practical Guide on GSTR 9 on RCM Related issues with Case Studies

GENERAL INFORMATION Annual Return once filed can not be revised Each Registered dealer who are liable to file GSTR-1 & 3B are liable to file Annual Return, Even Nil Annual return is required to be filed. Liability Can be discharge but ITC can not be claimed through Annual Return. Annual return to be filled on […]...

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RCM on Builders and Developers under GST

Recently notifications were issued in relation to the real estate industry, what are the provisions in relation to applicability of Reverse charge mechanism (RCM) to builders and developers, do they need to pay tax under RCM ?...

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Reverse Charge Mechanism (RCM) under GST

Concept of Reverse Charge under CGST Act, 2017 & IGST Act, 2017 explained in a lucid manner covering list of Goods & Services covered under RCM ...

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GST Payable under RCM on specified goods & services

GST Payable on Reverse charge mechanism basis (RCM) on specified goods and services GST is collected and paid by the Seller who is registered under CGST Act if tax is applicable unless GST is payable by the recipient of goods and services on reverse charge mechanism basis as per the provisions of Section 9(3) of […]...

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Overview of Security Service under GST as on 1st April, 2019

The term Security Service is not defined in the CGST Act, 2017. As per general understanding Security service is a service wherein a person supplies security personnel to another person for a consideration. However, in the old regime of Service Tax, the term Security Agency was defined under section Section 65(94) of Finance Act, 1994; wh...

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Reverse Charge Mechanism

What is the RCM (Reverse Charge Mechanism) under GST? Reverse charge is a mechanism under which the recipient of the goods or services is liable to pay the tax instead of the provider of the goods and services. Under the normal taxation regime, the supplier collects the tax from the buyer and deposits the same […]...

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