Purchase of Bileaves from Gram Sabha

[Ashwin Bhalakiya]

Dear Sir

I am registered in Maharashtra. We purchase Tendu Leaves from Gram Sabha, a local body in Maharashtra. They collect leaves and sale to us. They are not registered in GST. Hence not charging any GST. Whether being a registered buyer purchasing from Local Body, whether I am required to Pay RCM, because as per Notification No 4/2017 dated 28th June 2017, any purchase of Bidi Wrapper- leaves from Agriculturist then GST under RCM to be paid at 18%. But here seller is not agriculturist. Please guide whether I am required to Pay GST under RCM.

Ashwin

AI Summary

Reverse charge on purchase of tendu leaves applies only if the supplier is an agriculturist or acting as principal for collectors.
Applicability of Reverse Charge Mechanism on purchase of tendu leaves depends on supplier status: the agriculturist-specific RCM applies only when the supplier is an agriculturist. A Gram Sabha, as a local authority, is not an agriculturist and therefore that RCM entry does not apply. However, if the Gram Sabha is selling on behalf of individual collectors (principal-agent relationship) or if a notification treats supplies by a local authority as subject to RCM, reverse charge may still arise. Retain invoices and evidence of the supplier relationship.