RECOVER OF GST AMOUNT FROM SERVICE PROVIDER
This query is : Resolved
26 March 2025
Dear Sir,
We are transporter (service provider) following RCM basis system. Our case is under GST audit , officer is asking how do you know whether your customer has paid GST on 5% RCM or not, saying If they have not paid then the same will be recovered from us.
Kindly confirm can GST officer recover from us for non payment of GST by our customer and also how do I collect from each and every customer whether you has paid GST on RCM or not. We have more than 100 customer.
Is there option in GST portal where the I can track the same.
Thanks & Regards
Lingam
We are transporter (service provider) following RCM basis system. Our case is under GST audit , officer is asking how do you know whether your customer has paid GST on 5% RCM or not, saying If they have not paid then the same will be recovered from us.
Kindly confirm can GST officer recover from us for non payment of GST by our customer and also how do I collect from each and every customer whether you has paid GST on RCM or not. We have more than 100 customer.
Is there option in GST portal where the I can track the same.
Thanks & Regards
Lingam
27 March 2025
Liability for RCM Payments
Recipient’s responsibility: The customer receiving services under RCM is legally obligated to pay GST, not the service provider.
No recovery from the supplier: GST officers cannot recover unpaid RCM dues from the supplier (transporter) unless the supplier failed to comply with invoicing requirements (e.g., not indicating RCM applicability on invoices).
Supplier’s obligations:
Issue invoices clearly stating that GST is payable under RCM.
Ensure invoices comply with e-invoicing rules if applicable.
Reference Section 9(3) of the CGST Act and CBIC circulars clarifying RCM compliance.
Cite the Delhi HC judgment (Pace Setters Business Solutions v. Union of India) where courts upheld that RCM liability rests solely with the recipient.
Recipient’s responsibility: The customer receiving services under RCM is legally obligated to pay GST, not the service provider.
No recovery from the supplier: GST officers cannot recover unpaid RCM dues from the supplier (transporter) unless the supplier failed to comply with invoicing requirements (e.g., not indicating RCM applicability on invoices).
Supplier’s obligations:
Issue invoices clearly stating that GST is payable under RCM.
Ensure invoices comply with e-invoicing rules if applicable.
Reference Section 9(3) of the CGST Act and CBIC circulars clarifying RCM compliance.
Cite the Delhi HC judgment (Pace Setters Business Solutions v. Union of India) where courts upheld that RCM liability rests solely with the recipient.
27 March 2025
You are welcome.
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