Reverse Charge Mechanism GST

[VishnuPriya R]

Hi All,

As per Section 9(4) of Central Goods and Services Tax Act, 2017, if the services received from an unregistered persons to the tune of Rs.5,000/- and above in a year then the recipient of service is liable to pay Tax under Reverse Charge mechanism.

Is the above provision applicable for any payment above Rs. 5000/-/ For example- consultancy charges paid to professional (Unregistered) for Rs. 15000/-. Is RCM applicable for the same?

Thanks in advance.

AI Summary

Reverse Charge Mechanism under Section 9(4) no longer applies to general services from unregistered suppliers post-2018 amendments. A discussion on the applicability of the Reverse Charge Mechanism (RCM) under Section 9(4) of the Central Goods and Services Tax Act, 2017, addressed whether payments over Rs. 5,000 to unregistered suppliers, such as consultancy fees, are subject to RCM. Responses clarified that the Rs. 5,000 limit was removed by Notification No. 38/2017, and Section 9(4) was amended in 2018, limiting RCM applicability to specific services like those in the real estate sector. Consequently, general services from unregistered suppliers are not subject to RCM unless specified in subsequent amendments.