ITC on RCM supplies received from Composite dealer

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GST PROVISIONS :

ITC on goods / services on which composition levy is paid is blocked - Sec 17(5)(e)

Registered recipient receiving RCM supplies from unregistered supplier has to issue invoice to such supplier and a payment voucher at the time of payment

Composite dealer have to pay tax on Turnover in state which includes taxable supplies and exempt supplies

Composite dealers are required to issue Bill of supply instead of TAX invoice

Composite dealer is considered as a Registered person under GST

Queries :

1) Whether composite dealer will issue bill of supply even for outward RCM supplies ?

2) If answer to (1) is yes then will he mention in that bill that tax is payable under RCM ?

3) Whether outward RCM supply made by composite dealer is counted in turnover in state while calculation of his tax liability ?

4) If answer to (3) is yes then this would mean that both recipient and composite dealer pay tax on RCM. Is this an actual scenario ?

5) Will recipient of RCM supply from composite dealer issue tax invoice even if composite dealer has issued bill of supply ?

6) If answer to (5) is no then what documentary proof will recipient show to pay his RCM liability to government & how will he take ITC of RCM paid by
him in he doesn't issue tax invoice to composite dealer?

Please share your thoughts 🙏
Replies (3)
Queries : 1) Whether composite dealer will issue bill of supply even for outward RCM supplies ? = YES 2) If answer to (1) is yes then will he mention in that bill that tax is payable under RCM ? =YES 3) Whether outward RCM supply made by composite dealer is counted in turnover in state while calculation of his tax liability ? =YES IT IS COUNTED 4) If answer to (3) is yes then this would mean that both recipient and composite dealer pay tax on RCM. Is this an actual scenario ? =YES 5) Will recipient of RCM supply from composite dealer issue tax invoice even if composite dealer has issued bill of supply ? =If the recipient have Regular GST Reg they will Issue "TAX INVOICE" & only Composite Dealer need to issue " BILL OF SUPPLY" 6) If answer to (5) is no then what documentary proof will recipient show to pay his RCM liability to government & how will he take ITC of RCM paid by him in he doesn't issue tax invoice to composite dealer? = Regular dealer can used the Bill of Supply for RCM Payment and Input Tax Credit Claim. Why would the recipient issue Tax Invoice to a composite dealer ? Regular Dealer is getting the materials purchased from a composite dealer and they will be issued a BILL OF SUPPLY" from the composite dealer on which they can pay tax and claim the same as Input Tax (RCM Basis subject to eligibility) Regular dealer will issue Tax Invoice to resell the products and services purchased from composite dealer. Hope it helps.
1. Yes
2. Yes will mention the supply is under RCM .
3. Yes as Exempted supply So on no tax is applicable on Exempted supply.(Moreover its Receptient who is liable pay tax on RCM)
4 No only Recepeint is liable pay tax
5 Yes , the Recepeint is liable to issue self tax invoice (As per section 31(3)(f) & payment voucher (As per Section 31(3)(g)

6. My answer to (5) is yes , will issue tax invoice & Payment voucher
Thank you for you time and mind 😊


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