RCM on supply from unregistered person, Goods and Services Tax - GST

[venkataraman swaminathan]

Dear Sir

Good Morning

As per the Notification dt. 29.1.2019 , we.f. 1.2.2019 RCM GST liability , on purchases/ Services from Unregistered persons are waived up to 30.9.2019. Now is it applicable to pay under RCM from URD ,w.e.f. 01.10.2019. for the specified goods & services. Request guidance on this please.

Thanking you

V Swaminathan

[Shilpi Jain]

There is an amendment to the section 5(4) of IGST Act and 9(4) of the CGST Act as per which only notified supplies in respect of notified class of persons would be liable when procurred from unregistered persons. Hence, except for the notified supplies (eg: in case of real estate service suppliers paying @ 5%) there would be no liability of GST on procurements from URP.

[Ganeshan Kalyani]

The previous provision where purchase from any unregistered person by a registered person need to pay tax under rcm by recipient is rescinded.

AI Summary

Reverse Charge Mechanism under GST only applies to certain notified supplies from unregistered persons post-September 30, 2019. A query was raised regarding the applicability of Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST) for purchases from unregistered persons after September 30, 2019. The response clarified that amendments to the IGST and CGST Acts specify that only notified supplies to notified classes of persons are liable for RCM when procured from unregistered persons. Generally, there is no GST liability on such procurements except for certain notified supplies, such as real estate services taxed at 5%. The previous requirement for paying tax under RCM for all purchases from unregistered persons has been rescinded.