Reverse Charge Mechanism(RCM)

Originally posted by : Sagar VeKariya
	Yes, the limit of 20L does not apply to person paying tax under RCM

agree

The RCM provision gets attracted in two cases

1. If a registered dealer purchases goods or services from an unregistered dealer

2. For goods and services that are specifically covered under reverse charge.

In your case, if you are registered and you are making a purchase from an unregistered dealer then you will have to pay tax under reverse charge otherwise not.

RCM is basically depends upon registration,(A dealer having turnover less than 20L can also take registration voluntary.)

Vide Notification 08/2017 dated 28/06/2017, reverse charge provisions would not be applicable if the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, does not exceed Rs. 5000 in a day.