RCM ON COMPOSITE SUPPLY

[Kusalava InternationalLimited]

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

[DR.MARIAPPAN GOVINDARAJAN]

A person who opts to pay under composition scheme is registered with the GST. He is to pay lesser percentage of tax to the Department. He is not to recovery any tax from the recipient of the service. He is a registered person. So RCM is not applicable in case of purchases from such composite supplier.

[KASTURI SETHI]

Querist is mixing the word 'Composition: with 'Composite'.

[Kusalava InternationalLimited]

I have asked about Composition Scheme only.

[Himansu Sekhar]

No the saidv person is also a registered person.

[Kishan Barai]

If you are composite supplier no RCM would be applicable, else RCM applicable if purchase crosses above 5000 INR in a day.

[rajkumar shukla]

Since composition dealer would obviously be a registered person, purchases made from a registered person would not attract RCM.

AI Summary

Reverse Charge Mechanism not triggered for purchases from composition scheme registered suppliers, subject to supplier registration status. Composition dealers are registered persons who pay tax under a special scheme and do not collect tax from recipients; purchases from such registered composition suppliers do not attract the reverse charge mechanism. The issue often reflects confusion between 'composition' and 'composite' terminology, and some practitioners suggest RCM may apply where purchases exceed a daily threshold, indicating divergent views rather than settled rule.