RCM on Rent for Composite Dealer

[Praveen VR]

We have Clients who are composite dealers, hence cannot claim Input Tax Credit. With the RCM on Rent rule being incorporated, Should we still pay this (RCM on rent) without having any chance of adjustment against outward tax liability payment. If we pay this RCM payment, is there any chance of recovery or do we have an exemption for Composite dealers from paying RCM on rent

AI Summary

Composite Dealers Must Pay RCM on Rent Without ITC Adjustment, Per Sections 2(62) and 10(4) CGST Act. A query was raised regarding whether composite dealers, who cannot claim Input Tax Credit (ITC), must pay Reverse Charge Mechanism (RCM) on rent without any possibility of adjustment against their outward tax liability. Responses clarified that, according to Section 2(62) and Section 10(4) of the CGST Act, composite dealers are not entitled to recover or be exempt from paying RCM on rent. The rent paid under RCM becomes a cost of establishment, and no ITC can be availed, emphasizing the mandatory nature of these provisions.