TAXES UNDER RCM

[Renju Joy]

What is the actual benefit to govt on taxes paid under RCM other than presumptive tax payers paying such taxes. There is no loss of revenue when such taxes are not paid.

Thanks & Regards

AI Summary

Exploring Reverse Charge Mechanism in GST: Ensuring Compliance and Revenue, but Impacting Cash Flow and Refunds. The discussion revolves around the benefits and drawbacks of the Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST). Participants highlight that RCM helps prevent revenue leakage, ensures transactions are recorded, and increases the number of GST registrants. It allows unregistered suppliers to contribute to the GST system without needing registration. However, disadvantages include delayed input tax credit refunds for service providers and a temporary loss of cash flow for the government. Some argue that RCM taxes may not always result in revenue loss, as exemptions and ineligible credits affect certain taxpayers.