14 August 2022
Sir, I would like to clarify some doubt regarding RCM 1.Whether all kinds of goods purchased from Unregistered dealer will come under RCM or only Specific goods such as Beedi Wrapper, Cashew nut only will come under RCM ? 2.Whether Rs.5000/- per day limit will restrict the purchase from unregistered dealer? 3.Where RCM should be declared in GSTR 1 ? Because there is no provision available to declare the Purchase or availed service from Unregistered dealer ? 4.How to tally the sales declared in GSTR 3B & GSTR 1 in case Sales along with RCM transaction has been declared in GSTR 3B S No.3.1(d) whereas Only the Sales have been declared (Excluding RCM Supplies)? 5.Even though RCM transaction will not come under sales of the purchaser since it is purchase to him then why do GSTN treat them as Turnover as per GSTR 3B ? is it correct one ?
10 July 2024
Sure, I'll address your doubts regarding Reverse Charge Mechanism (RCM) under GST:
1. **Goods under RCM**: Not all goods purchased from unregistered dealers attract RCM. As per Section 9(4) of the CGST Act, 2017, RCM is applicable only on specific notified goods or categories of goods. Currently, the notified goods for RCM include: - Cashew nuts, not shelled or peeled - Tobacco leaves - Silk yarn - Raw cotton
Therefore, only purchases of these specific goods from unregistered dealers attract RCM.
2. **Rs. 5000/- per day limit**: There is no Rs. 5000/- per day limit for RCM under GST. This limit was proposed in an earlier version of GST but was not implemented. Hence, purchases from unregistered dealers for notified goods under RCM are subject to RCM irrespective of the transaction value.
3. **Declaration of RCM in GSTR-1**: RCM transactions do not need to be declared separately in GSTR-1. In GSTR-1, you need to report outward supplies made by you, which includes both supplies on which you charge GST (normal supplies) and supplies where RCM applies. The details of RCM will be auto-populated based on your GSTR-3B filings.
4. **Matching GSTR-3B and GSTR-1**: - In GSTR-3B, you declare both your outward supplies and the GST payable on RCM transactions in Table 3.1 (details of outward supplies and inward supplies liable to reverse charge). - In GSTR-1, you declare your outward supplies (both normal and those under RCM) in different tables depending on the nature of the supply (B2B, B2C, etc.). The data in GSTR-1 should reconcile with the figures reported in GSTR-3B.
5. **Treatment of RCM transactions in turnover**: - RCM transactions are not considered as part of your sales turnover because RCM is about the payment of GST liability by the recipient of goods/services. - However, in GSTR-3B, you are required to report the value of outward supplies attracting RCM (Table 3.1(d)). This reporting is for GST administration purposes to ensure correct tax payment and compliance.
In summary, RCM applies only to specific goods notified under the GST law. There is no daily limit for RCM transactions, and you do not separately declare RCM transactions in GSTR-1. Ensure your GSTR-3B accurately reflects both your normal sales and those attracting RCM to maintain compliance with GST regulations.
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