RCM UNDER GST ON GOODS & SERVICES

AUTHOR :CASUYASHANDCO

https://taxguru.in/goods-and-service-tax/rcm-gst-goods-services.html

There are two types of GST that apply to everyone. The first is a Forward Charge Mechanism (FCM) or Normal
Charge Mechanism in which supplier of goods and supplier of services is responsible for paying tax, and the
second is Reverse Charge Mechanism (RCM) in which recipient is accountable for payment of tax.

Section 9 of CGST Act, 2017 : Levy and Collection includes two major sec of Reverse Charge Mechanism
which is Sec 9(3) of CGST Act, 2017 and Sec 9(4) of CGST Act, 2017.

According to Section 9(3) of the CGST Act, 2017, the government announced a few particular kinds of supplies
of goods and services, or both, on the basis of which the receiver will be required to pay tax based on the reverse
charge mechanism.

This section depends on nature of supply and /or nature of supplier. The goods specified in the notification are –
Sr No. Supply of Goods Supplier of Goods Recipient of Goods

Cashew Nuts which should not be shelled or

1 Agriculturist Any registered person
peeled
2 Bidi Leaves (Tendu) Agriculturist Any registered person
3 Tobacco Leaves Agriculturist Any registered person
Any person who manufacturers silk
4 Silk Yarn Any registered person
yarn from raw silk
4A Raw Cotton Agriculturist Any registered person
State Government, Union Territory or
5 Supply of lottery Lottery distributor or sellin
any local authority
Central Government, State
Used vehicles, seized and confiscated goods,
6 Government, Union territory or a Any registered person
old and used goods, waste and scrap
local authority
Among the services included in the notice are –

Sr Supplier of
Supply of Services Recipient of Services
Services
No.

Taxable services provided by any person who

is located in a non-taxable territory and Any person who is
1. received by any person who is in a taxable in a non-taxable Any person who is located in a taxable co
territory other than non assessee online country.
recipient
a)any registered factory, b)any registere
Services provided by Goods Transport Agency corporative society established by any la
Goods Transport
2. (GTA) in respect of transportation of goods by registered under CGST/SGST/UTGST A
Agency
road. corporate, f)any partnership firm whether
under any law, g)casual taxable person
Services provided by an individual advocate or An individual
3. firm of advocates by way of legal services, advocates or firm Any Business Entity
directly or indirectly of advocates
4. Services provided by arbitral tribunal An arbitral tribunal Any Business Entity
5. Sponsorship services Any Person Any body-corporate or partnership firm
Services provided by government or local
authority, excluding –a)renting of immovable
property, b)services specified below- i]
services given by the Department of Posts in
the form of speed post, fast parcel post, life Government or
6. Any Business Entity
insurance, and agency services to persons other Local authority
than the government; 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
A director of a
Services provided by a director of a company
7. company or a body A company or a body corporate
or a body corporate
corporate
Services provided by insurance agent to any Any Insurance
8. Any person carrying on insurance busines
person carrying insurance business agent
Services provided by a recovery agent to a
Any Banking company or a financial inst
9. banking company or a non-banking financial A recovery agent
banking company
company
A person located in
non-
Services by way of transportation of goods by
taxable territory to
10. ship/boat/vessel from a place outside India up The customs station of clearance in India.
a person located in
to the customs station of clearance in India.
non-taxable
territory
 Transfer or permitting the use or enjoyment of Author or music
11. a copyright relating to music, an author, composer, Publisher, music company, producer
composer, photographer and artistic work photographer etc.
Radio taxi or passenger transport services
provided through E-commerce operator Taxi driver or a
12 Any person
Rent a cab operator

Members of
Supply of services by the members of overseeing
13 Overseeing Committee to Reserve Bank of Committee Reserve Bank of India
India constituted by the
RBI
According to Sec 9(4) of CGST Act, 2017, on the recommendations of council government has notified a class
of registered person in respect of specified categories of goods or services or both received from an unregistered
supplier then such registered person shall pay the tax on reverse charge basis as the recipient of such supply of
goods or supply of services or both.

Such transactions are always intra-state sales since an unregistered provider is unable to undertake inter-state
sales.