RCM on Payment of Municipal Plan Approval Charges by the Builder

[Rajendra Prasad]

Dear Sir

Whether RCM is applicable on Payment of Municipal Plan Approval Charges by the Builder to the Municipality.

AI Summary

Debate on Reverse Charge Mechanism for Municipal Plan Approval Charges: Exemption Under Article 243W? A builder inquired about the applicability of Reverse Charge Mechanism (RCM) on municipal plan approval charges paid to a municipality. Responses varied: one suggested it might be exempt under constitutional provisions, another stated municipalities are not considered government entities, thus RCM does not apply. A third response referenced a FAQ indicating that services related to urban planning and construction provided by governmental authorities, as listed under Article 243W of the Constitution, are exempt from tax. The discussion highlights differing interpretations of tax obligations concerning municipal services under the Goods and Services Tax (GST) framework.