Reverse Charge Mechanism under GST Liability to GST on Recipient of GOODS and SERVICES under RCM Goods or Services received from Unregistered persons">

Call us free: +91 9380928214

Reverse Charge Mechanism under GST (RCM)

Liability to GST on Receipient of GOODS and SERVICES
under Reverse Charge Mechanism

About GST     GST Services      GST Accounting     Composition     Jobwork in GST     RCM     GST Returns     SITE MAP    

GST-reverse charge on supplies

Taxes needs to be paid under reverse charge for any supply of goods if supplier of goods is an un-registered person and recipient is registered

What is Reverse Charge mechanism?

In normal supplies, the supplier collects the tax from the recipient on forward charge and deposits the same after adjusting his output tax liability with input tax credits. But under the reverse charge mechanism liability to pay tax on a particular supply is on the recipient of supply. That is, taxes needs to be paid under reverse charge for any supply of goods if supplier of goods is an un-registered person and recipient is registered.

Reverse Charge mechanism on supply of Goods.

GST-reverse charge on supplies

Reverse charge on Supplies of Goods or Services received from Unregistered persons:

Reverse charge mechanism (RCM) would apply on Supply of taxable goods or services by an unregistered supplier to a registered person.

GST-GSTconsultants

The exemptions as applicable to particular category of goods or services would apply on goods or services covered under reverse charge.
The rate of tax as applicable to particular goods or services would apply on goods or services covered under reverse charge.
The recipient will be required to issue invoice on the date of receipt of goods or services containing details of tax invoice.
The recipient would be required raise payment voucher when payment is made to vendors supplying RCM goods or services.
Details of RCM receipts must be disclosed in GSTR-2.
RCM liability should be paid in cash by debiting electronic cash ledger.
Recipient would be eligible to take credit of input tax credit subject to satisfaction of other conditions.

There are several procedural requirements as well in case of any reverse charge supply received by recipient.

  • Issuance of Invoice by recipient for all reverse charge supplies.
  • Issuance of Payment Vouchers by recipient in case of payment in respect of reverse charge supplies.
  • Determination of time of supply of goods in such cases.
  • Upload of invoice particulars for reverse charge liability.
  • Payment of GST by E-cash ledger as credit is not permitted to be utilized for reverse charge liability thus leading to Working Capital Blockage.
  • Claim of Input Tax Credit of taxes paid under reverse charge subject to eligibility as per the act.

We, KBS Accountant, believe in personal-touch consulting centered on your needs at all times:

KBS Accountant will help you file tax returns, prepare annual accounts and claim expenses — so you can be confident of doing things properly and staying on the right side of the Goods and Services Tax Department.

KBS Accountant will do much more than just crunch numbers for you. As a trusted outsider, we can provide valuable, unbiased advice to help develop your business. Our methods are novel, strategic, adaptable and aligned with your business culture. We specialize in providing tailor made solutions to your business requirements.

KBS Accountant Advisory Services

Whether you are big, small or medium, whether your business is high tech or low tech we can support you with the skills of expert advisor. Come up with innovative and high-quality solutions that will work in any situation anywhere. Please feel free to inquire about our services. Contact us for your solutions . If it is not a service we provide, we would be more than happy to refer you to a qualified professional.

now just dial for jobs

Stay tuned

Connect with us and stay in the loop

 

Contact us

Questions? We've got answers.
Try us.

EMAIL US