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Reverse charge mechanism Query

22 June 2022

My honourable persons ,I have an big doubt about Unregistered person RCM . Actually my query is if I received or supplied unregistered person means whether I have to pay RCM ???

as per new rules what can I claim ITC is there any exempted?

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8 Replies

CA Puja Sharma (Chartered Accountant) (5010 Points)
Replied 22 June 2022

No, RCM will not apply if you make inward supplies from unregistered persons.

The government has specified a few cases in which RCM will apply in case of purchase from unregistered persons and not on all purchases.

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MPR Sanjay Kumar (3118 Points)
Replied 22 June 2022

For instance

Case 1 I am a unregistered supplier I am supplying goods to my recipient in this case whether who have to pay GST RCM will applicable whom?

case 2 ,goods received from unregisistered person whether I should have to pay GST of RCM or my supplier??

as per current GST rules RCM is not placed?

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 23 June 2022

1. If the receipient is registered then RCM is applicable and receipient has to pay GST under RCM

2. Yes. If you are registered then you have to pay GST under RCM .

if both are unregistered then it is not required to pay GST under RCM

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MPR Sanjay Kumar (3118 Points)
Replied 23 June 2022

Some people tells to me there is no RCM rules nowadays not applicable it is true or not sir? what are the situations the RCM not applicable

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 23 June 2022

It depends on various factors like turnover of both parties

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CA Puja Sharma (Chartered Accountant) (5010 Points)
Replied 23 June 2022

RCM does not apply to all supplies received from an unregistered person.

As per Section 9(4) of CGST Act, 2017 and Section 5(4) of IGST Act, 2017, any supply of goods or services from an unregistered supplier to a registered supplier will attract RCM in the hands of the registered person.

But this provision was put on hold by Notification No. 38/2017- Central Tax (Rate) dated 13.10.2017. And RCM will apply in the above cases only in specified instances provided by the govt.

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