Applicability of RCM on Government Services

[Ramanathan Seshan]

Dear Experts,

I’m looking for clarity on the applicability of the Reverse Charge Mechanism (RCM) under GST for certain services provided by the government. Specifically, does RCM apply to:

1. Factory license issuance and renewal

2. FSSAI license issuance and renewal

3. Other regulatory licenses provided by government departments

Requesting esteemed members to share practical experience, or official references regarding this.

Regards,

S Ram

AI Summary

Reverse Charge Mechanism on government-provided licensing services: generally exempt when constituting statutory registration, but exceptions exist.
Applicability of the Reverse Charge Mechanism to government-provided services depends on the service's character and notification scope. Statutory registration and licensing services, including issuance and renewals such as factory and FSSAI licences, are generally treated as exempt from RCM under notification-based exemptions. By contrast, services like assignment of rights to natural resources and renting immovable property are commonly captured by RCM. Practitioner views diverge, so determining liability requires identifying the exact service type and the notification entry invoked.