RCM OR NOT
This query is : Resolved
21 February 2024
Hello Sir,
I am a GST Registered Trader of Fly Ash.Kindly informed me that whether Fly Ash supplies (vide HSN Code 2621) attract the GST section 9(4) or 9(5). I supply the Fly Ash as a Trader only to the Registered Person.
My question is whether I have to pay tax on reverse Charge on purchase of Fly Ash from unregistered.
Kindly suggest me in this regards.
Thanking you,
I am a GST Registered Trader of Fly Ash.Kindly informed me that whether Fly Ash supplies (vide HSN Code 2621) attract the GST section 9(4) or 9(5). I supply the Fly Ash as a Trader only to the Registered Person.
My question is whether I have to pay tax on reverse Charge on purchase of Fly Ash from unregistered.
Kindly suggest me in this regards.
Thanking you,
10 July 2024
For the supply of Fly Ash (HSN Code 2621), the GST provisions under section 9(4) and 9(5) apply differently:
1. **Section 9(4) of CGST Act, 2017:**
- This section pertains to the reverse charge mechanism (RCM) for specified goods or services when purchased from an unregistered supplier by a registered person.
- As per Notification No. 4/2018-Central Tax (Rate) dated 25th January 2018, fly ash falling under HSN Code 2621 is covered under RCM when purchased from an unregistered supplier.
- Therefore, as a GST registered trader of fly ash, if you purchase fly ash from an unregistered supplier, you are liable to pay GST under reverse charge.
2. **Section 9(5) of CGST Act, 2017:**
- Section 9(5) deals with the liability to pay tax on specified categories of supply of goods or services, irrespective of whether the supplier is registered or not.
- Fly ash is not specifically listed under section 9(5) for liability to pay tax by the recipient (registered trader) irrespective of the supplier's GST registration status.
- Therefore, the liability to pay GST under section 9(4) (reverse charge) would primarily apply when you purchase fly ash from an unregistered supplier.
### Conclusion:
- **Reverse Charge Mechanism (RCM):** You need to pay GST under RCM when purchasing fly ash from an unregistered supplier. This means you are liable to pay the applicable GST on such inward supplies directly to the government instead of the supplier charging it to you.
- **Registered Person Supply:** When you supply fly ash to another registered person, you will charge GST as per the regular provisions and issue a tax invoice accordingly.
Ensure compliance with GST regulations regarding documentation, invoicing, and payment of taxes under RCM. It's advisable to consult with a GST expert or tax advisor for precise interpretation and compliance with GST laws related to your specific business transactions.
1. **Section 9(4) of CGST Act, 2017:**
- This section pertains to the reverse charge mechanism (RCM) for specified goods or services when purchased from an unregistered supplier by a registered person.
- As per Notification No. 4/2018-Central Tax (Rate) dated 25th January 2018, fly ash falling under HSN Code 2621 is covered under RCM when purchased from an unregistered supplier.
- Therefore, as a GST registered trader of fly ash, if you purchase fly ash from an unregistered supplier, you are liable to pay GST under reverse charge.
2. **Section 9(5) of CGST Act, 2017:**
- Section 9(5) deals with the liability to pay tax on specified categories of supply of goods or services, irrespective of whether the supplier is registered or not.
- Fly ash is not specifically listed under section 9(5) for liability to pay tax by the recipient (registered trader) irrespective of the supplier's GST registration status.
- Therefore, the liability to pay GST under section 9(4) (reverse charge) would primarily apply when you purchase fly ash from an unregistered supplier.
### Conclusion:
- **Reverse Charge Mechanism (RCM):** You need to pay GST under RCM when purchasing fly ash from an unregistered supplier. This means you are liable to pay the applicable GST on such inward supplies directly to the government instead of the supplier charging it to you.
- **Registered Person Supply:** When you supply fly ash to another registered person, you will charge GST as per the regular provisions and issue a tax invoice accordingly.
Ensure compliance with GST regulations regarding documentation, invoicing, and payment of taxes under RCM. It's advisable to consult with a GST expert or tax advisor for precise interpretation and compliance with GST laws related to your specific business transactions.
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