What is the RCM under GST??

Section 2(98) of CGST Act,2017

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
 GST Reg under RCM
• All persons who are required to pay tax under reverse charge have to
register for GST irrespective of the threshold Limit.
Aggregate Turnover Registration Applicability
Required
Earlier Limits – For the sale of Goods/Providing Services
Exceeds Rs.20 lakh Yes – For Normal Up to 31st March
Category States 2019
Exceeds Rs.10 lakh Yes – For Special Up to 31st March
Category States 2019
New Limits – For Sale of Goods only.
Exceeds Rs.40 lakh Yes – For Normal From 1st April 2019
Category States
Exceeds Rs.20 lakh Yes – For Special From 1st April 2019
Category States
Situations Where The Reverse Charge Will
Apply
• CBEC has notified Services on which RCM is applicable
• Service through an E-commerce Operator
• Unreg dealer selling to a Reg Dealer(Govt will notify class of Persons
and category of services on which RCM is applicable under this
category)- Till date only 1 service has been notified i.e.
Security Service Provided by any person other than Body corporate to
a reg person located in Taxable Territory w.e.f. 01.01.2019
 Time Of Supply For Goods Under Reverse Charge(Chapter IV)
( Time and Value of Supply Section 12)
• In case of reverse charge, the time of supply shall be the earliest of
the following dates -:
• (a) the date of receipt of goods OR
• (b) the date of payment OR
• (c) the date immediately after THIRTY days from the date of issue of
invoice by the supplier (60 days for services)
• If it is not possible to determine the time of supply under (a), (b) or
(c), the time of supply shall be the date of entry in the books of
account of the recipient
Time Of Supply For Goods Under Reverse Charge
Example:
• 1.Date of receipt of goods 15th May 2018
• 2.Date of payment 15th July 2018
• 3.Date of invoice 1st June 2018
• 4.Date of entry in books of receiver 18th May 2018
• Time of supply of goods 15th May 2018
• If for some reason time of supply could not be determined supply
under (1), (2) or (3) then it would be 18th May 2018 i.e., date of entry
Time Of Supply For Goods Under Reverse
Charge
Date of Receipt Date of Date of Payment Time of Supply of Explanation
of Goods Invoice Goods
29th July 18 5th Aug 2018 10th Nov 2018 29th July 2018 The date of receipt of goods, in
this case, is earlier than the date
of payment and 30 days from the
date of invoice. Hence, the time of
supply will be 29th July, 2018.
15th Aug 2018 25th Aug 2018 30th July 2018 30th July 2018 The date of payment is earlier
than the date of receipt of goods
and 30 days from date of invoice.
Hence, the time of supply will be
30th July, 2018.
10th Aug 2018 1st July 2018 15th August 2017 31st July 2018 In this case, 30 days from date of
invoice is earlier than the date of
receipt of goods and the date of
payment. Hence, the time of
supply will be 31st July, 2018
Time of supply for services under reverse
charge
• In case of reverse charge, the time of supply shall be the earliest of
the following dates :-
• (a) The date of payment OR
• (b) The date immediately after SIXTY days from the date of issue of
invoice by the supplier (30 days for goods)
• If it is not possible to determine the time of supply under (a) or (b),
the time of supply shall be the date of entry in the books of account
of the receiver of service.
list of Major services on which reverse charge is
applicable(100% Liability is of Service Receiver)
Sr.No. Nature of Service Service Provider Service Receiver

Casual Taxable person, body corporate, partnership

1 Goods Transport Agency Service Goods Transport Agency firm, any society, factory, any person registered under
CGST, SGST, UTGST Act.

Services supplied by Director of a A director of a company or a body corporate(E.g.

2 A director of a company or a body corporate
Company Sitting Fees)

3 Legal Consultancy Services An individual advocate or firm of advocates An individual advocate or firm of advocates

Services Supplied by an Arbitral

4 An arbitral tribunal Any business entity.
tribunal to a business entity

Taxi driver or Rent a cab operator ( if service

5 Rent a Cab Service provided by e-commerce operator e.g. OLA, Any person - E-commerce Operator
UBER)
list of services on which reverse charge is
applicable
Sr.No. Nature of Service Service Provider Service Receiver

Any person providing Anybody corporate or partnership

6 Sponsorship services
sponsorship services firm
Services provided by way of
renting of Motor vehicle
7 Rent a Cab Service Importer
provided to a body
corporate(w.e.f. 01.10.19)
Supply of Services by
Author or music composer,
Author or music
photographer, artist, etc (
8 composer, Publisher, Music company, Producer
Transfer or permitting the use
photographer, artist,
or enjoyment of a copyright)
etc
 Reverse charge on
Import of Goods and
Services

• any service supplied by any person who is located in a non-taxable

territory to any person other than non-taxable online recipient”
• IGST payable under RCM in case of Import of Goods/ services and the
payment is to be made in cash, credit to the extent of IGST paid in
cash to be utilized in the same month.
 Tax Invoice and Input Tax Credit
• The supplier has to mention in his tax invoice that the tax is payable
on reverse charge
• The service recipient can avail Input Tax credit on the Tax amount that
is paid under reverse charge on goods and services.
• Reverse charge has to be paid in cash first and then it can be utilized
for payment of taxes .
• Self Invoice to be issued in case of supply of services by unreg dealer
to reg dealer for availment of credit under RCM.
Any Questions??