Save Rs 499. Go Ad-Free with CAclubindia Pro for 2 Full Years. Subscribe Now!

Assessment of short payment of RCM

RCM 464 views 2 replies

Jayesh NP

Tax Practitioner

181 Points Posted on 02 March 2020

What is the GST Rate of royalty paid on mining? Can the AO demand balance tax due to shortage of tax paid on RCM due to mistake in classification or is it enough to pay interest for one month?. The govt has no revenue loss as the amount of tax payable on RCM is available as ITC. Also all the details are correctly reported in 3B but mistake occured in rate of tax.

Replies (2)

Pankaj Rawat

GST Practitioner

55067 Points Posted on 03 March 2020

As per Entry No. 5 of Notification No. 13/2017 - Central Tax (Rate) , royalty to Govt is under RCM.

RCM Rate Applicable :
For example, if the royalty charges is paid for extraction of sand, then the GST rate applicable on the sand shall be considered for discharging GST on the royalty

Yes The Tax Officer can issue notice under Section 73,74 or under section 61 (Scrutiny) of returns.

Yes as per Section 50 of CGST interest is applicable on any short paid Tax .

The ITC is available only when we pay RCM in cash & Moreover RCM is Liability pay Tax being shifted from supplier to Receptient , means Receptient is liable to pay tax on as Supplier being Exempted.

Jayesh NP

Tax Practitioner

181 Points Posted on 03 March 2020

Ok but if gst rate is 18% and I have paid RCM @ 5%.can the AO demands differential tax or is it enough to pay interest for one month as itc credit would have been available if tax was paid.