Rcm on tender fees paid.

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This query is : Resolved

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The discussion explores whether the Reverse Charge Mechanism (RCM) applies to tender fees paid to government departments. While some interpretations suggest tender fees are a supply of service, the general consensus is that RCM is not applicable. Government departments typically charge GST directly (forward charge), and tender fees are not usually covered under RCM provisions for unregistered suppliers or specific notified services.

Manoj

Manoj (Querist)

26 April 2023 Whether RCM is applicable in respect of tender fees paid to Government deptt. If yes, under which notification. Please guide.

CA SANDESH MAHIPAL

CA SANDESH MAHIPAL (Expert)

26 April 2023 Dear Manoj Ji,

1. Refer decision by MAHARASHTRA AUTHORITY FOR ADVANCE RULING in case of NAVI MUMBAI MUNICIPAL CORPORATION, in which it has been stated that online or offline tender fees is a supply of service and GST should be charged under SAC code 9997 @18%.

2. Refer Notification No.12/2017- Central Tax (Rate) Dt.28.06.2017, in Entry No.9 it has been stated that if consideration for services provided by CG/SG/UT/Local authority does not exceed Rs.5000/-, it is exempt.

3. Refer Notification No.13/2017 -Central Tax (Rate) Dt.28.06.2017, It has been stated that services provided by CG/SG/UT/Local authority to any Business Entity, RCM is to be paid by recipient.

I am just sharing relevant decisions/notifications with you so that you can form your decision on your own.

Thanks & Regards
CA Sandesh Mahipal

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

20 July 2025 Is RCM applicable on tender fees paid to government departments?
No, RCM is generally NOT applicable on tender fees paid to government departments.
Tender fees are usually considered a fee for providing information or a document and not a taxable service under GST attracting reverse charge.
Government departments typically charge GST on their own, and the payer is not liable to pay GST under reverse charge on such fees.
Relevant Points / Notifications:
As per GST laws, reverse charge under Section 9(3) and 9(4) applies only on specific notified services or when received from unregistered suppliers.
Tender fees paid to government departments are neither supplied by unregistered persons nor notified under RCM provisions.
Government departments or authorities usually levy GST on tender fees at source (forward charge).
Therefore, no reverse charge GST liability arises on the tender fees paid to Government.

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