RCM ON COMPOSITE SUPPLY

[Kusalava InternationalLimited]

We are purchased stationery items from composite supplier.RCM applicable on purchases or not?

AI Summary

Reverse Charge Mechanism doesn't apply to purchases from composition scheme suppliers under GST, unless daily purchases exceed INR 5000. A company inquired whether Reverse Charge Mechanism (RCM) applies to purchases from a composite supplier under the Goods and Services Tax (GST) regime. Multiple participants clarified that a supplier under the composition scheme is registered and pays a lower tax rate without recovering tax from the recipient, thus RCM does not apply. One participant noted confusion between 'composition' and 'composite.' Another added that RCM might apply if daily purchases exceed INR 5000, but generally, purchases from a registered person, such as a composition dealer, do not attract RCM.