My Confusion in regarding GST on RCM applicability. Please solve. a) Is RCM is applicable on all direct (wages/electricity/freight etc) and indirect expenses (Salary/stationary/conveyance/staff welfare/general office exp)
b) is RCM is applicable on all entity, i.e. proprietorship/partnership/pvt ltd etc
c) Is RCM is applicable on Composite dealers also.
08 June 2017
RCM is applicable as per provision u/s 9(3) and 9(4). Service by employee to employer is not supply and so not taxable. RCM is applicable to all taxable persons. Yes RCM is applicable to composite dealer also.
10 June 2017
In terms of Section 9(3) of CGST Act,2017, RCM is applicable only the specified category of supply of goods or service or both
In terms of Section 9(4) of CGST Act,2017 - Supply of taxable goods by un - registered person to registered shall be liable for payment of GST under RCM
In terms of schedule III - Services by an employee to an employer in course of employment or in relation to employment is not liable for GST.
Reply to 1 - RCM is not applicable on salary, staff welfare, and conveyance as the these expense are in the course or in relation to an employment
Stationary and general office exp if you buy these goods from as un -registered is liable for GST subject these are taxable goods i.e. in case any exemption given by way of notification for said material. RCM is not applicable as the supply of goods are not a taxable goods by un- registered person.
Reply to 2- RCM as state above is two type 1) Specific category of RCM and 2) RCM on supply of goods by the un - registered person to a registered person. GST under specific category- RCM is applicable only if the condition are given are fulfilled for example - in case of legal services, RCM is applicable if the service provided by an individual advocate to business entities (i.e. Companies) . In the same example if the said service provided to individual RCM is not applicable.
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