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RCM on Directors


Asha Vaishnava (Manager - Finance & Accounts)     09 October 2019

Asha Vaishnava
Manager - Finance & Accounts 
 1 likes  172 points

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sirs/madam,
I have a query, our company director has registered in GST portal and he raises invoices to the company under RCM. now how and where is he suppose to show this RCM in his returns ? GSTR 1 and 3B, please advise.

avater

RAJA P M ("Do the Right Thing...!!!")     09 October 2019

RAJA P M
"Do the Right Thing...!!!" 
 8291 likes  113451 points

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In GSTR 1 under b2b with tick in "reverse charge attract "

in GSTR 3B under exempted supplies...

Asha Vaishnava (Manager - Finance & Accounts)     09 October 2019

Asha Vaishnava
Manager - Finance & Accounts 
 1 likes  172 points

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Thank you sir, GSTR 1 after ticking Reverse Charge Attract" what rate of GST to opt? Zero ?

avater

Divakar (Student CA Final )     09 October 2019

Divakar
Student CA Final  
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Actual rate applicable on that service i.e 18%...it is aaded in liability of company after ticking in reverse charge applicable

Asha Vaishnava (Manager - Finance & Accounts)     09 October 2019

Asha Vaishnava
Manager - Finance & Accounts 
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Okay sir, wont it show to director as liability to pay if taken as 18%?

avater

Divakar (Student CA Final )     09 October 2019

Divakar
Student CA Final  
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As u r ticking in rcm box...then it is automatically transfered in company liability

Asha Vaishnava (Manager - Finance & Accounts)     10 October 2019

Asha Vaishnava
Manager - Finance & Accounts 
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Okay, thank u so much

avater

Sivaramakumar (GM-ACCOUNTS)     18 November 2019

Sivaramakumar
GM-ACCOUNTS 
 4 likes  137 points

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RCM applies only to the receipient of service and not for the service provider. I couldnt find reasons what  for the invoices is raised by your director ( assuming other than salary ) is received from the company .

The company is liable to pay the tax under RCM and claim the same . No adjustment of ITC allowed.

When you book the expenses in the companys accounts  then you  need to show in your GSTR 1 under the heading Expenses liable to reverse charges thereby creating your liability. Payment will be reflected in GSTR 3B once you have paid and will automatically be included in the eligible ITC for the month in which the payment is made.

Hope your are cleared.


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