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RCM on Directors

Asha Vaishnava (Manager - Finance & Accounts) (290 Points)

09 October 2019

sirs/madam,
I have a query, our company director has registered in GST portal and he raises invoices to the company under RCM. now how and where is he suppose to show this RCM in his returns ? GSTR 1 and 3B, please advise.

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7 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 09 October 2019

In GSTR 1 under b2b with tick in "reverse charge attract "

in GSTR 3B under exempted supplies...

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Asha Vaishnava (Manager - Finance & Accounts) (290 Points)
Replied 09 October 2019

Thank you sir, GSTR 1 after ticking Reverse Charge Attract" what rate of GST to opt? Zero ?

Divakar (Student CA Final ) (11857 Points)
Replied 09 October 2019

Actual rate applicable on that service i.e 18%...it is aaded in liability of company after ticking in reverse charge applicable

Asha Vaishnava (Manager - Finance & Accounts) (290 Points)
Replied 09 October 2019

Okay sir, wont it show to director as liability to pay if taken as 18%?

Divakar (Student CA Final ) (11857 Points)
Replied 09 October 2019

As u r ticking in rcm box...then it is automatically transfered in company liability

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Asha Vaishnava (Manager - Finance & Accounts) (290 Points)
Replied 10 October 2019

Okay, thank u so much

Sivaramakumar (GM-ACCOUNTS) (142 Points)
Replied 18 November 2019

RCM applies only to the receipient of service and not for the service provider. I couldnt find reasons what for the invoices is raised by your director ( assuming other than salary ) is received from the company .

The company is liable to pay the tax under RCM and claim the same . No adjustment of ITC allowed.

When you book the expenses in the companys accounts then you need to show in your GSTR 1 under the heading Expenses liable to reverse charges thereby creating your liability. Payment will be reflected in GSTR 3B once you have paid and will automatically be included in the eligible ITC for the month in which the payment is made.

Hope your are cleared.