GST Under RCM

[Niraj Kumar]

Hi...

We have a rental office. We deposit GST as per the rent agreement under RCM.

On 28th Feb, we paid rent to the house owner and missed depositing the GST.
Now we are paying the rental for March and depositing GST for two months. Will it cause any penalty on us?

[KASTURI SETHI]

Pay along with interest now.. No penalty is  leviable. See Section 73 (5), (6), (7) & (8) of CGST Act.

[Sadanand Bulbule]

Simple and effective reply Sir.

[Shilpi Jain]

Where tax is paid voluntarily there will not be any penalty. Just pay it along with interest calculated at 18% p.a.

[Ganeshan Kalyani]

Yes, interest applies.

AI Summary

Reverse Charge Mechanism compliance: voluntary GST payment after delay avoids penalty but attracts interest at statutory rate. If GST under the reverse charge mechanism on rental services was missed for a prior month, remit the outstanding tax now with interest; voluntary payment precludes penalty. Calculate interest at the statutory rate and deposit both tax and interest promptly; this approach aligns with CGST Act provisions on recovery and interest and avoids penal action if payment is made before adjudication or recovery proceedings.