What is RCM in GST with example?
What is RCM in GST with example?
The registered buyer who has to pay GST under reverse charge has to do self-invoicing for the purchases made. In intra-state purchases, CGST and SGST have to be paid under reverse charge mechanism (RCM) by the purchaser. However, if the promoter purchases cement from an unregistered supplier, he must pay tax at 28\%.
What is GST rate under RCM?
(i) where the supplier of the service charges GST @ 12\% from the service recipient, the service recipient shall not be liable to pay GST under RCM; and, (ii) where the supplier of the service doesn’t charge GST @ 12\% from the service recipient, the service recipient shall be liable to pay GST under RCM.
What is RCM in simple words?
GST Reverse Charge Mechanism (RCM) basically means that the GST is to be paid and deposited with the Govt by the recipient of Goods/ Services and not by the supplier of Goods/ Services. However, under the Reverse Charge Mechanism, the GST is paid and deposited by the recipient with the Govt.
Is ITC available on RCM?
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 be availed. The reverse charge mechanism is applicable to payments made in advance also.
Is GTA under RCM?
Even composition dealers are liable to pay GST under RCM. Anand will pay GST on RCM if he hires a GTA whether he is registered as a composition dealer or as a normal dealer….What is the rate of GST on GTA?
| Service by a GTA | GST rate |
|---|---|
| Transporting goods (GST paid by GTA)* | 5\% No ITC or 12\% with ITC |
Is RCM applicable on govt fees?
Services provided by Police or security agencies of Government to PSU/private business entities are not exempt from GST. Such services are taxable supplies and the recipients are required to pay the tax under reverse charge mechanism on the amount of consideration paid to Government for such supply of services.
What is forward charge?
Under GST law, generally supplier (seller of goods or services or both) collects tax from recipient (buyer/ customer of goods or service or both) and pay to the Government (net of ITC) (but ultimately GST is borne by end customer or consumer that is why it is called indirect tax) this mechanism is known as forward …