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RCM in Real estates

Vikash shaw (Auditor) (62 Points)

20 August 2020

does we(Real estate buisness) have to pay Rcm on unregistered purchase..?

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 20 August 2020

Yes, Section 9(4) is applicable in case of promotor/developers
1. If promoter (Builder/developer) fails to purchase at least 80% of the value of input and input services, from registered suppliers, than falls short of the said threshold of 80 per cent., tax shall be paid by the promoter on value of input and input services comprising such shortfall at the rate of eighteen percent on reverse charge basis.
2.RCM Tax rate on Cement purchased from unregistered Person would be 28%.
Whereas RCM rate on capital goods purchased from unregistered would be rates as specified for that assets.

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CA Sunil Kumar (Chartered Accountant) (4524 Points)
Replied 20 August 2020

Yes, if At Least 80% of the total value of inputs and input services have not been purchased from registered suppliers.GST @ 18% on reverse charge basis on all such inward supplies to the extent short of 80% of inward supplies from registered supplier except cement on which tax has to be paid at 28% (if purchased from unregistered persons).