RECOVER OF GST AMOUNT FROM SERVICE PROVIDER

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This query is : Resolved

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This discussion clarifies that under the Reverse Charge Mechanism (RCM) in GST, the liability to pay GST lies with the recipient of the service, not the service provider. GST officers generally cannot recover unpaid RCM from the service provider unless they fail to meet invoicing requirements. The service provider's responsibility is to issue clear invoices indicating RCM applicability and to understand that tracking customer payments is not typically feasible through the GST portal.

lingam

lingam (Querist)

26 March 2025 Dear Sir,

We are transporter (service provider) following RCM basis system. Our case is under GST audit , officer is asking how do you know whether your customer has paid GST on 5% RCM or not, saying If they have not paid then the same will be recovered from us.

Kindly confirm can GST officer recover from us for non payment of GST by our customer and also how do I collect from each and every customer whether you has paid GST on RCM or not. We have more than 100 customer.

Is there option in GST portal where the I can track the same.

Thanks & Regards
Lingam

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 March 2025 Liability for RCM Payments
Recipient’s responsibility: The customer receiving services under RCM is legally obligated to pay GST, not the service provider.
No recovery from the supplier: GST officers cannot recover unpaid RCM dues from the supplier (transporter) unless the supplier failed to comply with invoicing requirements (e.g., not indicating RCM applicability on invoices).

Supplier’s obligations:
Issue invoices clearly stating that GST is payable under RCM.
Ensure invoices comply with e-invoicing rules if applicable.

Reference Section 9(3) of the CGST Act and CBIC circulars clarifying RCM compliance.
Cite the Delhi HC judgment (Pace Setters Business Solutions v. Union of India) where courts upheld that RCM liability rests solely with the recipient.

lingam

lingam (Querist)

27 March 2025 Thank you very much sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 March 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 September 2025 Good luck....

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