Reverse charge under gst (few cases)


Accounts exe

We all know that reverse charge GST will be apllicable when a registred supplier purchae goods or services from unregistered supplier. But what about in following case ?

  • When a registered person pays rent to owner who is not registered ?
  • When a registered person buys stationery for office purpose from unregistered person?
  • when a registered person hire a labour   

is RCM applicable in these cases? 

 
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Practicing Company Secretary

From my point of view,

RCM will be applicable on the goods or services recieved from unregistered supplier, in the course of furtherance of business.

  • When a registered person pays rent to owner who is not registered ? Yes if it  is a commerical property used for furthernace of business.
  • When a registered person buys stationery for office purpose from unregistered person? Yes
  • when a registered person hire a labour   ? Yes


 

 
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Accounts exe

Thanks

but what if in case no 1 .. I have a office in my mother house and paying rent to my mother?


Total likes : 1 times

 
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Deputy Manager-Accounts & GST Consultant

Madam,

In second case, RCM is applicable.

In third case, if you hire labour from an agency and it is registered, then RCM not applicable

 
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accountant

1)“Reverse charge’’ means the liability to pay tax by the recipient of supply of goods or services

GOODS MEANS GOODS WHICH YOU PURCHASE AND SALE.

STATIONARY ITEMS ARE NOT GOODS , IF YOU DONT RESALE THAT.

SO NO RCM APPLICABLE.

2)RCM IS NOT APPLICABLE ON RENT

 

 
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Accounts exe

Dear Rocky kindly read RCM law Carefully 

 
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*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.

I think section 9(4) of CGST ACT will be very hardship for all person if it is true that reverse charge is applicable all type of expenses.... As it liable to pay reverse charge on all type of expenses..

During the year some company declare fake expenses to reduce profit... Now that will be very hardship.....

 

Here Point no. 3 about labour I think not applicable because labour may consider wages and wages may consider as salary..

So I think here reverse charge is not applicable on salary...

But if labour has been given by an unregistor supplier then reverse charge applicable...

 
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*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.

Maximum people saying that reverse charge is applicable on all type of expenses if purchase it from unregistered dealer but I don't believe it....

Why and How a person pay reverse charge on conveyance expenses, Milk, Tea or any other small type of expenses?

 

I think here Mr. Rocky is correct only the topic of "Goods' as same imagination I have....

If a product is not your ITEM(PURCHASE AND SALE) then you don't need to pay reverse charge.....

But ITC available on all cases....

 
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Accounts exe

A registered person would be required to pay GST on all supplies received by it from un registered person.

And supplies inculde :

Sale, Transfer, Barter, Exchange, Licence, rental 

So i don think it is only for goods 

need further advice from expert 


Total likes : 2 times

 
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Practicing Company Secretary

I have a office in my mother house and paying rent to my mother?

GST would be applicable on RCM basis as it is a taxable supplies.

Explaination :As per section 9(4), supply of taxable goods or services or both from unregistered supplier to registered supplier, on RC basis, recipent will be liable to pay tax in relation to such supply.

if you hire labour from an agency and it is registered, then RCM not applicable

If you just hire a labour, and has employer and employee relation, GST is not applicable as it is neither a services or goods as per Sch III

 


Total likes : 3 times

 
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