Payment of tax under reverse charge mechanism

This query is : Resolved

Megha Masta (Querist)
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08 September 2017 Dear Expert,

Requesting your expert input on below query.

Under RCM a recipient have to pay tax on behalf of supplier subject to the deduction of Rs.5000 per day. So below are my concerns.
1. 5000 per day means 5000 *30= 1,50,000 Monthly exemption? Recipient is eligible for Rs. 1.5 lac exemption on monthly basis?

2. If RCM is below Rs. 5000 monthly, then recipient is not liable to pay such amount as per the exemption given by the Govt.

Thanking you.

Dibin Divyakumar

Dibin Divyakumar (Expert)
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08 September 2017 It's not a monthly execmption as you think, the govt for reducingthe difficulty exempted inward supply from all unregistered dealer (URD) upto Rs. 5,000/- per day. So if in any day your purchases from URD exceeds Rs.5000/- you have to pay RCM on the full amount of URD Purchase of that day, you have to verify the URD Purchases each day wise.

Megha Masta

Megha Masta (Querist)
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08 September 2017 In my case, Our office is rented premise and our landlord is unregistered under GST. We are paying Rs 25000 as rental. Now, on behalf of landlord we need to pay GST @ 18% which comes to 4500 monthly payable GST. if I calculate the amount this comes below 5000 per day criterion. In this case are we exempted to pay GST under RCM?

Arun Gupta

Arun Gupta (Expert)
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08 September 2017 RCM will attract for transaction of more than 5000 wit URD

Arun Gupta

Arun Gupta (Expert)
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08 September 2017 @ Megha Masta
RCM will attract on Rent (paid on monthly basis)
and
exemption is given day wise and not on monthly basis

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