In GST, the person who sells the goods or services in general, charges GST from the customer and deposits it to the government. But under certain circumstances, the responsibility of the GST is not on the Supplier but on the person who receives the item or the service, it is called Reverse Charge Mechanism (RCM). In the Reverse Charge, the buyer deposits the GST directly to the government by not paying the seller. Partial Reverse Charge is also done in some situations i.e. the responsibility of some part of the GST is on the purchaser and the rest is responsible for the seller. Here in this post we describe some of faqs on RCM under GST:- Q. Can any registered dealer bound to pay tax under RCM if he purchases from unregistered dealer? Ans. Yes, any registered dealer pay tax under RCM if he purchases from unregistered dealer in the following cases: a) Daily total expenses is greater than 5,000 Rs from an un-registered dealer b) Import of Services c) Necessary RCM services like Transporter/Legal services Read Also: GST E-Way Bill: Features, Objective & Benefits Q. If I buy from a registered dealer, then in that case can also I am obliged to pay RCM? Ans. No,Payment of RCM is to be done only when you have purchased from an unregistered dealer (excluding mandatory services like transport services and lawyers). In the case of compulsory services, RCM always has to pay when purchased from registered merchant. Q. What i do, If i purchase goods for office expenses includes from registered as well as un-registered dealer? Ans. In that case, you need to pay RCM for purchases made from un-registered dealer. Q. How much tax amount percent can i claim as ITC? Ans. You will get a 100% ITC claim for the tax paid under RCM. However, there are some expenses such as Food and Beverage, Cab rental, Club membership on which you will not get ITC claim for payment of RCM. Otherwise, you will get ITC on most of the expenses. Also Read: Frequently Asked Questions and Answers on GSTR-1 Q. If I am getting 100% ITC on RCM amount,then what will government get? Ans. As we know that all over process done by government to decrease the degree of un-registered purchases and cover to maximum number of people under GST. Q. Do i need to pay RCM for office expenses of Rs.6000 from big bazaar on groceries items for transaction? Ans. No,since Big Bazaar or any other such big store must be a registered dealer so you need not to pay RCM for this expense. Q. If i purchased stationary of Rs.5500 from a shopkeeper who does not have GSTIN. Do i need to pay RCM? Ans. Yes, in that case you purchase stationary from an un-registered dealer, so you must pay RCM for it. Q. I have purchased an office stationery from a non-registered dealer in which ball pen was imposed on 12% and 18% tax levied on register and letter pad in single bill. So how do I pay RCM for this? Ans. You should calculate 12% tax and 18% tax on the amount spent on ball pens & letter pad which is on the amount spent on the register and letter pad and then pay RCM to the government. Q. Do I need to pay RCM for expense on airplane / rail tickets for my office employees? Ans. NO Visit the Source: GST Forum India
2 Comments
Satyanarayan Agrawal
4/18/2018 08:48:37 am
I pay Rs. 5000/- per month as rent do i have to pay under RCM
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