Payment of GST under RCM for Manufacturing Unit

[PRAVIN TALEGAONKAR]

Dear Sir,

We are chemical manufacturing company located in Maharashtra. We have Labour contractor and consultants registered and unregistered under GST.

My question is whether, we need to make payment of GST Under RCM on supplies received from Non Registered dealer.

U/s 9(3) Labour contractor are not included in this list.

Regards

Pravin Talegaonkar

[Padmanathan KV]

Manpower supply is not covered under section 9(3) RCM. However, Security services are under RCM from 01-01-2019.

[Ganeshan Kalyani]

RCM on supplies received from non-registered dealer already discontinued. Now, only the list of services and specified goods covered in RCM notification when procured are taxable. Labour contractor's service is not under the RCM list, hence no GST payable at your end being recipient.

[KASTURI SETHI]

I agree with both experts. Labour contractor means Manpower supplier and it is under FCM.

[PRAVIN TALEGAONKAR]

Thanks for your valuation comment.

AI Summary

Reverse Charge Mechanism applies only to notified supplies; labour contractor services fall under forward charge, not RCM. RCM liability is confined to supplies expressly covered by statutory RCM notifications; labour contractor/manpower supply is not in the RCM list and thus does not attract reverse charge on the recipient, whereas security services are a notified service subject to reverse charge. Ordinary payments to labour contractors are therefore governed by the Forward Charge Mechanism and GST need not be paid by the recipient unless the supply is specifically listed under RCM.