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Reverse Charge Mechanism

05 February 2019

Whether the registerd tax payer has to pay on rcm basis when he purchases machinery (worth 10 lakhs) from un-registered delear

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7 Replies

CA Akshay Hiregange (Partner - Audit & Assistance) (4615 Points)
Replied 05 February 2019

No he does not need to. RCM under section 9(4) CGST Act & 5(4) IGST Act are liable only to notified list of persons who would be liable to such RCM. Presently, no such list has been notified, which means, No RCM liability for purchases from unregistered person.

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pritesh (CA Final student) (7101 Points)
Replied 05 February 2019

no need to pay rcm on that.

Vinod Babu (24191 Points)
Replied 06 February 2019

No need to pay GST on RCM

Adaikkalaven Muthu (113 Points)
Replied 06 February 2019

I have a doubt whether ITC can be taken by the registered delar, when the machinery purchased from un-registered delar

Vinod Babu (24191 Points)
Replied 06 February 2019

No way to claim ITC purchased from Unregistered dealer.
When unregistered dealer does not have gst registration, then how can he charge gst.

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KAAMIL AHAMADH (ACCOUNTING/TAX CONSULTANCY AND ITR/GSTR FILING) (253 Points)
Replied 07 February 2019

No you cannot take ITC
Concept of ITC Comes only when you paid GST on purchases...
Since you are purchasing from Unregistered Dealer so you are not paying any GST at all...
hence the question of getting ITC not at all arises.