TaxTMI 
TaxTMI 
We are purchased stationery items from composite supplier.RCM applicable on purchases or not?
RCM ON COMPOSITE SUPPLY
05 Aug 2017 
6 Replies 
3247 Views Asked by
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. (AI Summary)
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. (AI Summary)