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Can anyone tell me why RCM has to be paid only in cash...?

CA Vivek chaudhary (Delhi) (1339 Points)

10 October 2019

why tax on rcm basis has to be paid in cash under gst....??

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5 Replies

CA Vivek chaudhary (Delhi) (1339 Points)
Replied 10 October 2019

Because as per section 49(5) ITC has to be utilised only for payment of output tax and tax on rcm basis is input tax liability , Therefore it has to be paid only through e-cash ledger.....

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CA Dhruva Kalamanji (Chartered Accountant ) (1996 Points)
Replied 10 October 2019

As per rules it is like that

1 Like

daxesh (Manager Finance & accounts) (195 Points)
Replied 10 October 2019

In other than RCM registered person pays GST tax to vendor along with his bill payment. hence cash outflow. in case of RCM there is no payment of GST tax to vendor.hence need to be paid directly to govt RCM tax

2 Like

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 10 October 2019

Yes... I fully agreed to Mr Daxesh view...

@ Mr Daxesh.,

very good view and explanation...

1 Like

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 10 October 2019

Its prescribe in Rule 36(1)(b) of CGST Act : credit is available on invoice issued accordance to provision of clause (f) of Section 31(3) of CGST Act, SUBJECT TO PAYMENT OF TAX