Rcm (reverse charge mechanism)
This query is : Resolved
05 May 2018
As you know the threshold limit of purchase from unregistered dealer is Rs. 5000.00 under RCM, What should I do if I have 18 Branches under one GST registration?
1. Every 18 branches can spend or purchase from unregistered dealer upto Rs. 5000.00 each. And no RCM liability will levy on me.
OR
2. In all 18 branches we can only spend or purchase from unregistered dealer only upto Rs. 5000.00 . I mean all 18 branches expenses or purchase will be treated as one. And what will be the RCM liability.
Please reply
1. Every 18 branches can spend or purchase from unregistered dealer upto Rs. 5000.00 each. And no RCM liability will levy on me.
OR
2. In all 18 branches we can only spend or purchase from unregistered dealer only upto Rs. 5000.00 . I mean all 18 branches expenses or purchase will be treated as one. And what will be the RCM liability.
Please reply
05 May 2018
second option...
but, Reverse Charge Mechanism (in case of supplies made by unregistered persons to registered persons) delayed till 1st July 2018
but, Reverse Charge Mechanism (in case of supplies made by unregistered persons to registered persons) delayed till 1st July 2018
20 July 2025
Threshold Rs. 5,000 under RCM — Is it per branch or overall?
The Rs. 5,000 threshold is per GST registration, NOT per branch.
So, if you have 18 branches operating under a single GSTIN, all their purchases from unregistered suppliers are aggregated.
This means the total purchases from unregistered dealers by all 18 branches combined should be within Rs. 5,000 to avoid RCM.
If the total exceeds Rs. 5,000 (for example, combined purchases from unregistered dealers across branches is Rs. 6,000), then you have to pay GST under RCM on the entire amount (or as per the applicable rules).
The Rs. 5,000 threshold is per GST registration, NOT per branch.
So, if you have 18 branches operating under a single GSTIN, all their purchases from unregistered suppliers are aggregated.
This means the total purchases from unregistered dealers by all 18 branches combined should be within Rs. 5,000 to avoid RCM.
If the total exceeds Rs. 5,000 (for example, combined purchases from unregistered dealers across branches is Rs. 6,000), then you have to pay GST under RCM on the entire amount (or as per the applicable rules).
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