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rcm on interstate services received from unregistered professional

SEEMA MALHOTRA (ACCOUNTANT) (96 Points)

03 August 2017

if i receive any consultancy from interstate professional/ consultant who is not registered in gst.
1. shall i have to pay gst under rcm
2. if yes, can i take credit of gst deposited by me under rcm.

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7 Replies

Mayank Chauhan (Associate) (65 Points)
Replied 03 August 2017

yes as per section 5(4) of the igst act reverse charge is applicable and can take credit of the same. However as per section 24 of. cgst act 2017 such person is under compulsion to get registered but recipient has to comply by the law.

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SEEMA MALHOTRA (ACCOUNTANT) (96 Points)
Replied 03 August 2017

on receipt of interstate service

SEEMA MALHOTRA (ACCOUNTANT) (96 Points)
Replied 03 August 2017

but there is little confusion that whether we can take credit of rcm on services when we take SERVICES FROM INTERSTATE service provider.
RCM CREDIT CAN NOT BE AVAILED ON INTERSTATE SERVICES RECD.?

Mayank Chauhan (Associate) (65 Points)
Replied 04 August 2017

same can be availed please refer definition of input credit in cgst which clearly include interstate reverse charge.

CA.Krupa Mochi (Sr.Manager (F&A)) (133 Points)
Replied 20 March 2018

The Central Government vide Notification No. 38/2017 – Central Tax (Rate) dated 13th October, 2017, has amended Notification No. 8/2017 – Central Tax (Rate) dated 28th June, 2017 by omitting proviso under Paragraph 1 which deals with the exemption limit of Rs. 5000 per day available to the registered person on intra-State procurement of goods or services from any or all unregistered suppliers. Now, exemption shall be available to all the registered persons till March 31, 2018 without any limit in case of supply procured from unregistered supplier. Inter-State supplies received from unregistered supplier is also exempt under corresponding notification issued under IGST Act.

Therefore, any registered person procuring taxable goods/services from unregistered suppliers, shall not be required to pay CGST under reverse charge mechanism U/s 9(4) of CGST Act, 2017 till March 31, 2018 with effect from 13th Oct, 2017.