RCM Liability under GST- RCM ITC utilisation

[Chandrasekar Duraisamynaidu]

One of my new client is the scrap dealer who purchase scrap (unconditioned - not fit for further use harvestors & commercial vehicles ) from B2C ,dismentling it and sold for scrap to B2B & B2C.

Query:

When purchase whether RCM is applicable for him

[KALLESHAMURTHY MURTHY K.N.]

Sir,

A registered person who purchases scrap from an unregistered person is liable to RCM u/s 9(3) effective from 10-10-2024 as per Notification No. 06/2024-Central Tax (Rate) dated 8th October, 2024. Tax is payable @18% by raising a self -tax invoice.

AI Summary

Reverse Charge Mechanism applicability on scrap purchases from consumers and consequent input tax credit treatment for dealers. Whether the Reverse Charge Mechanism applies when a scrap dealer purchases unconditioned scrap from B2C sellers and the resulting entitlement and mechanism for utilising Input Tax Credit when the dealer dismantles goods and resells scrap to B2B and B2C recipients.