RAJESH ACCOUNTANT

[rajesh subramanian]

DEAR SIR

WE ARE PVT LTD COMPANY, WE ARE PAYING 11500 / PER MONTH AS SECURITY CHARGES ( MONTHLY SALARY FOR NIGHT SHIFT ) TO AN INDIVIDUAL . THIS WILL COVER UNDER RCM ? IF WE ARE PAYING GST UNDER RCM , SHL WE TAKE CREDIT ?

AI Summary

Reverse Charge Mechanism Applies to Monthly Security Charges Paid by Companies, Per Notification No.29/18-CT(Rate). A private limited company inquired about the applicability of Reverse Charge Mechanism (RCM) under GST for monthly security charges paid to an individual. Experts confirmed that RCM applies as per Notification No.29/18-CT(Rate) effective from January 1, 2019. The company must pay the tax in cash and can claim Input Tax Credit (ITC) in the same return after payment. ITC eligibility should be assessed under sections 16, 17(1), and 17(2) of the CGST Act, considering the nature of the outward supply and its business use. The experts' consensus supports this interpretation.