Why is RCM treated as Current Assets in the books instead of Booking it as expense or showing it as liability?
RCM is not an expense but liability which is to be paid by us.
What is the rationale for the same?
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RCM accounting treatment
Replies (5)
tax payable under RCM is your current liabilities and. if you can avail ITC after payment under RCM then same amount will be go to your ITC leadger which is generally under current assets
Agree With Gupta Ma'am
Agreed. I wasn't clear in my question. Why do we pass entry for RCM as
Tax on RCM (Current Asset) Dr
To CGST payable
To SGST Payable
Tax on RCM (Current Asset) Dr
To CGST payable
To SGST Payable
Because RCM liability First Required to Pay in Cash
Then Avail credit
Okay, understood. Thank you so much
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