RCM for sand and jelly purchase -URD

[Rajaraman Iyer]

Sir/s,

My client is a contractor who purchases ready mix concrete. However for some works, he needs to procure sand, jelly from unregistered dealers. Amounts are paid by crossed cheques. However the taxability under GST by discharging tax under RCM is under question. I request for clarification, if we have to pay GST @ 5% under RCM and claim tax credit under ITC? though the GST circular on RCM does not specify these items, this practice is being followed by some of his co-businessmen.

AI Summary

Contractors Not Liable for GST Under RCM on Sand and Jelly from Unregistered Dealers per Section 9(4) CGST Act A contractor queries about the applicability of the Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) for purchasing sand and jelly from unregistered dealers. Two responses clarify that there is no GST liability under RCM for these items when procured from unregistered vendors, as they are not specified under Section 9(4) of the CGST Act. If GST is paid, it can be claimed as Input Tax Credit (ITC). The responses reference the CGST (Amendment) Act, 2018, which specifies categories of goods or services subject to RCM.