What is the intention behind the following provision is made in gst?
Gst on reverse charge shd be paid only in cash and can't be set off against ITC
3 Replies
Tarun Kumar
(Chartered Accountant)
(180 Points)
Replied 11 May 2018
you have to pay GST on reverse charge in cash because you are gonna take ITC for the same.
venkata karthik
(13 Points)
Replied 11 May 2018
why can we set off ITC of our input against RC payment
Tarun Kumar
(Chartered Accountant)
(180 Points)
Replied 11 May 2018
just understand purchase concept
if you buy ₹ 100 goods with 5% gst
then you have to pay ₹ 105 to registered suppliers and take ITC of ₹ 5.
under RCM you are just paying ₹ 100 to unregistered supplier because there is no gst included.
that's why you have to first pay ₹ 5 gst in cash under RCM and after payment you will take ITC of ₹ 5.
if you buy ₹ 100 goods with 5% gst
then you have to pay ₹ 105 to registered suppliers and take ITC of ₹ 5.
under RCM you are just paying ₹ 100 to unregistered supplier because there is no gst included.
that's why you have to first pay ₹ 5 gst in cash under RCM and after payment you will take ITC of ₹ 5.
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