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GST liability under RCM

Lila (Job) (520 Points)

21 March 2025

Is RCM applicable on consultancy services provided by unregistered consultant to a registered party. It is not an advocate.

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MPR Sanjay Kumar (3145 Points)
Replied 22 March 2025

Yes, the Reverse Charge Mechanism (RCM) is applicable when a registered party receives consultancy services from an unregistered consultant, even if the consultant is not an advocate. Under RCM, the liability to pay GST shifts from the supplier (the unregistered consultant) to the recipient (the registered party).

The applicable GST rate for consultancy services under RCM is 18%. The registered recipient must pay this tax directly to the government and can claim input tax credit for the GST paid under RCM, provided they meet the necessary conditions for claiming ITC