RCM on Groundnut

This discussion clarifies the applicability of Reverse Charge Mechanism (RCM) on groundnut purchases from farmers during the 2017-2018 financial year. RCM was applicable to inward supplies from unregistered persons until 13th October 2017. Therefore, purchases made before this date from farmers would be liable under RCM. If these groundnuts are subsequently sold by the taxpayer at a 5% tax rate, Input Tax Credit (ITC) can be claimed.