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 applicability: unregistered-supplier services generally not taxable at recipient unless specified by notification.
Reverse charge liability for services from unregistered suppliers is not automatic for all payments: statutory amendment and subsequent notifications restrict recipient liability to classes of goods or services expressly prescribed by notification. General services such as consultancy, repairs, and maintenance from unregistered persons are not covered by reverse charge unless specifically listed in a notification; certain sectors (for example specified transport, legal, and real estate-related notifications) remain within reverse charge scope.