Rcm
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 June 2013
Dear Sir,
An individual who has annual turnover about 20 lacs from retail business. Whether he is also liable to pay service tax under RCM.
An individual who has annual turnover about 20 lacs from retail business. Whether he is also liable to pay service tax under RCM.
09 September 2013
there is no turnover limit specified for apply service tax under RCM
what kind of service you are receiving and from whom
what kind of service you are receiving and from whom
20 July 2025
As of pre-GST (i.e., under Service Tax regime before 1st July 2017) — which is the context for a question dated 04 June 2013 — here's how Reverse Charge Mechanism (RCM) applied:
✅ Applicability of RCM under Service Tax (Pre-GST Era):
Even individuals or small businesses (including those with turnover below ₹10 lakh exemption threshold under Service Tax) were liable to pay Service Tax under RCM if they received services that attracted RCM.
🔴 Threshold exemption (₹10 lakh) was not available for liability under reverse charge.
🧾 Example Services under RCM (Pre-GST):
Goods Transport Agency (GTA)
Legal services from an advocate
Services from a director to a company
Sponsorship services
Security services in some cases
📌 Conclusion:
Even if the individual's retail business turnover is ₹20 lakh, and he is not registered for Service Tax, he would still be liable to pay Service Tax under RCM if he received taxable services covered under RCM.
✅ Yes, RCM applies regardless of whether the individual has crossed the service tax registration threshold.
✅ Applicability of RCM under Service Tax (Pre-GST Era):
Even individuals or small businesses (including those with turnover below ₹10 lakh exemption threshold under Service Tax) were liable to pay Service Tax under RCM if they received services that attracted RCM.
🔴 Threshold exemption (₹10 lakh) was not available for liability under reverse charge.
🧾 Example Services under RCM (Pre-GST):
Goods Transport Agency (GTA)
Legal services from an advocate
Services from a director to a company
Sponsorship services
Security services in some cases
📌 Conclusion:
Even if the individual's retail business turnover is ₹20 lakh, and he is not registered for Service Tax, he would still be liable to pay Service Tax under RCM if he received taxable services covered under RCM.
✅ Yes, RCM applies regardless of whether the individual has crossed the service tax registration threshold.
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