RCM on Metal Scrap

[VENU K]

Notification 6/2024 has made RCM applicable for Metal Scrap (Chapters 72 to 81). Chapters 72 to 81 talks about different metals like Iron and Steel, Articles of Iron and Steel, Copper and Articles, Nickel and Articles, Aluminium, Lead, Zinc, Tin and other base metals.

Now the question is what will be the RCM liability in the following situations when a registered dealer purchases the following articles from an unregistered customer.

1. Old washing machine in exchange by a washing machine dealer

2. Old gas stove in exchange for a new one by an LPG dealer

3.Old Computer by a computer dealer in exchange

I understand that Scrap is defined under GST tariff Chapter 72

Waste and scrap means

1.All metal waste and scrap

2. Metal goods definitely not usable as such because of breakage, cutting up, wear and other reasons.

AI Summary

Metal Scrap Tax Puzzle: RCM Applicability Hinges on Item Functionality and Metal Value Under GST Notification 6/2024 A discussion forum explores Reverse Charge Mechanism (RCM) applicability for metal scrap under GST Notification 6/2024. Participants debate the classification of second-hand goods versus metal waste, focusing on items like old washing machines, gas stoves, and computers. The consensus suggests that non-functional items primarily valued for metal content fall under RCM, while functional second-hand goods and e-waste have different tax treatments. Trade practices and item condition are crucial in determining tax liability.