RCM applicability of Government Entity

[Raman Juyal]

If a government entity receives construction services from CPWD (a government agency), the CPWD is liable to pay tax under the Forward Charge Mechanism (FCM), or the government entity under the Reverse Charge Mechanism (RCM).

AI Summary

Debate on GST Reverse Charge Mechanism for Construction Services to Government Entities by Central Public Works Department. A discussion on the applicability of the Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST) for a government entity receiving construction services from the Central Public Works Department (CPWD) reveals that CPWD is a Central Government department, not an agency. The debate centers on whether the government entity should pay GST under RCM. It is clarified that services provided by the Central Government, State Government, Union Territory, or Local Authority to another such entity are exempt, but this does not apply to government entities or authorities. The period in question is 2017-2022.