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Gst reverse charge mechanism

Manjiri Shende (Accounts Executive) (46 Points)

20 September 2017

If I am paying 80,000/- per month to a trainer, whether Reverse Charge under GST is applicable to my organisation or not?

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12 Replies

anonymous (student) (750 Points)
Replied 20 September 2017

CAN YOU ELABORATE "TRAINER"

Manjiri Shende (Accounts Executive) (46 Points)
Replied 20 September 2017

Trainers means we have tie ups with colleges, so we appoint trainers who teach students in colleges. Those trainers are not registered under GST. We are making payment on monthly basis not on daily basis, but we appoint them on monthly basis.

So my question is whether RCM is applicable to us or not?

RAJA P M ("Do the Right Thing...!!!") (127355 Points)
Replied 20 September 2017

Yes. It's under RCM basis.
You pay the tax under RCM basis....

Manjiri Shende (Accounts Executive) (46 Points)
Replied 20 September 2017

Will you explain how RCM is applicable?

RAJA P M ("Do the Right Thing...!!!") (127355 Points)
Replied 20 September 2017

Yes the trainer is URD...

Manjiri Shende (Accounts Executive) (46 Points)
Replied 20 September 2017

Exemption limit is not applicable to URD? Beacause there is an expemtion from RCM upto Rs. 5000/- per day.

Abisheik (Articled Clerk) (173 Points)
Replied 20 September 2017

GST under RCM is applicable for all payments made to unregistered dealers(URD) in aggregate more than Rs.5000 per day thus the amount paid to your trainer exceeds Rs.5000 and even if it is for the entire month it will be counted as a payment made to URD more than Rs.5000 in a specific day, so you have to pay GST under RCM for this transaction.

Authors Note: You dont have to pay GST under RCM if you pay your Trainer in 16 transactions of Rs.5000 each in 16 different days of the month after ensuring you didnt pay even a single penny in apart from Rs.5000 paid to the trainer in that day to any other URD.

RAJA P M ("Do the Right Thing...!!!") (127355 Points)
Replied 20 September 2017

But, You pay 800 or 80000....?!

RAJA P M ("Do the Right Thing...!!!") (127355 Points)
Replied 20 September 2017

Above said way (5000*16) is not applicable. The payment is calculated in entire month also the die up is monthly....

Manjiri Shende (Accounts Executive) (46 Points)
Replied 20 September 2017

I am paying 80,000 not 800.. but for one whole month

Abisheik (Articled Clerk) (173 Points)
Replied 20 September 2017

Sorry sir in my point of view, It is completely possible, if the trainer raises individual bills for every 5000 rupees he receives from the institution.

RAJA P M ("Do the Right Thing...!!!") (127355 Points)
Replied 20 September 2017

Originally posted by : Abisheik
	Sorry sir in my point of view, It is completely possible, if the trainer raises individual bills for every 5000 rupees he receives from the institution.