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Whats the benefit of reverse charge to govt?
If person paying tax takes input of the same what's the benefit of the same to the govt?
Replies (5)
No Benefit to govt...it was imposed to transfer liability of tax on particular transaction from one person to another eg rcm on director sitting fees is to be paid by company
but company is ultimately going to take input of the same so what's the tax collection benefit?
there is not banefitial matter.
only liable person of gst is changed..
i.e receiver not a provider.
only liable person of gst is changed..
i.e receiver not a provider.
Govt has benefit.. If you pay rcm on unregistered purchase by which govt can easily to record your all direct expense and indirect expense by which person cant manipulate the books of accounts in fy.
For eg. Gst on director's service is paid by the company, directors maY be many. Instead of collecting gst from each individual, its better to collect from one person. I believe that's one of the benefits of RCM.
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