RCM on supply from unregistered person

[Kaustubh Karandikar]

What is the consequence of, The Central Board of Indirect taxes & Customs(“CBIC”) has notified that Exemption from tax under ‘Reverse Charge Mechanism (RCM)’ under GST stands rescinded w.e.f. February 01, 2019 in respect of Intra-state Purchases of Goods and Services from Unregistered Dealers (of value upto ₹ 5,000 per day), in view of bringing into effect, the amendments (regarding RCM on supplies by unregistered persons) in the Amended CGST/ IGST/ UTGST Acts 2018. Consequently Notification No. 8/2017- Union Territory Tax (Rate), dated the 28th June, 2017, Notification No. 8/2017-Central Tax (Rate), dated the 28th June, 2017, and Notification No. 32/2017-Integrated Tax (Rate), dated the 13th October, 2017, have been rescinded. Is RCM re-introduced or otherwise?

AI Summary

Discussion on GST Reverse Charge Mechanism Changes: RCM Exemption for Unregistered Dealers Rescinded; Awaiting Section 9(4) Notifications. The discussion revolves around the changes in the Goods and Services Tax (GST) concerning the Reverse Charge Mechanism (RCM) for supplies from unregistered persons. Effective February 1, 2019, the exemption under RCM for intra-state purchases from unregistered dealers was rescinded. However, the applicability of RCM under Section 9(4) of the CGST Act is contingent upon government notification specifying the categories of goods, services, and registered persons subject to RCM. Until such notifications are issued, RCM is not applicable. Participants in the forum discuss the implications and advise on the current non-applicability of RCM.