GST RCM APPLICABLITY

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This query is : Resolved

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The discussion clarifies that GST Reverse Charge Mechanism (RCM) is generally not applicable to commission paid to unregistered vendors, as the blanket provision under Section 9(4) was withdrawn in February 2019. RCM now applies only to specific notified supplies and situations, such as real estate promoters procuring less than 80% from registered suppliers or purchasing cement/capital goods from unregistered persons. Recipients of RCM supplies must register for GST, though a daily threshold exemption exists for minor purchases from unregistered suppliers.

CMA Pravat Kumar Parida

CMA Pravat Kumar Parida (Querist)

16 February 2024 Whether GST RCM is applicable on Selling commission paid to a unregister vendor.

RAJA P M

RAJA P M (Expert)

16 February 2024 No... Rcm not applicable for the commission paid to URP.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

17 August 2025 The blanket RCM provision for supplies from unregistered persons under Section 9(4) was withdrawn in Feb 2019. It's now limited to notified cases only.
Real estate promoters face RCM if:
They procure less than 80% of inputs/services from registered suppliers,
They buy cement or capital goods from unregistered persons.
Section 9(3) continues to apply RCM for other specific supplies—like legal services, e-comm services, raw agricultural goods, etc.
RCM recipients must register under GST regardless of turnover thresholds.
A ₹5,000 daily threshold exemption protects recipients from RCM on minor purchases from unregistered suppliers.
Including these elements ensures a comprehensive understanding of RCM’s scope and exceptions under the current GST framework.

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