Get 3 Yrs of CCI Pro Membership at Greater Value. Subscribe Now!

Reverse Charges (RCM) GST Implication for Sole Proprietorship

396 views

Save Share

ashwin kumar

26 Points Posted on 06 July 2023

I am a Taxpayer and run a Sole Proprietorship. While I try to do as many online transactions as possible under B2B by giving my GST number, I understand several transactions happen there the supplier does not charge GST. Typical examples in my case are software that I buy from online portals from outside India (for personal use and not for business), some local restaurants where I pay by card, but they do not charge GST, etc. The Question is should I pay reverse RCM GST for every single transaction? I do this for major transactions where I use the purchase for business.

Replies (3)

Quick Summary

This discussion explores the GST implications of Reverse Charges (RCM) for sole proprietorships, particularly when personal and business expenses share the same GST number. The core question is whether RCM GST must be paid on every transaction where the supplier doesn't charge GST, especially for services sourced from outside India. Clarity is sought on distinguishing between business and personal use purchases to determine RCM applicability.

RAJA P M

"Do the Right Thing...!!!"

77792 Points Posted on 06 July 2023

No, RCM applicable Only for the notified business.

So, want more clarity from your query

ashwin kumar

26 Points Posted on 07 July 2023

Yes sir. For example, I have a Sole Proprietorship, but the GST number is for Personal PAN as well, right? So, in that case, am I liable to pay Reverse GST if I take any service where the supplier is outside India and does not pay GST? For example, I paid $20 to a music composer in Australia through PayPal for composing a Happy Birthday tune for my daughter. How to separate personal from business related in the case of a Sole Proprietorship for "registered" GST individuals?

ashwin kumar

26 Points Posted on 18 July 2023

Anyone knows how to deal with personal expenses if a foreign website does not charge the GST and it is not my for my business? Is Reverse GST applicable to every transaction even if it is not related to my Sole Proprietorship business? My GST number is same for personal and business (Sole Proprietorship). What is the solution?