TaxTMI 
TaxTMI 
TaxTMI 
RCM ON EXPENSES DECLARE IN PROFIT & LOSS ACCOUNT
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....CM ON EXPENSES DECLARE IN PROFIT & LOSS ACCOUNT<br> Query (Issue) Started By: - MAHTAB KHAN Dated:- 18-8-2025 Last Reply Date:- 21-8-2025 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>Received SCN from GST Dept. They asked to clarify RCM liability on expenses like Freight, Power & Fuel, Salary, Labour Charges, Staff Welfare, Insurance, Traveling, Conveyance, Telephone, Audit Fee, Account....
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....ing, Legal, Misc., Shop, Bank Charges, Printing & Stationery. Also asked to explain treatment of Rebate & Discount received with evidence. ?? Which of these expenses actually attract RCM? And how to justify rebate/discount before dept? Reply By Sadanand Bulbule: The Reply: Most of the above listed expenses do not attract RCM. Only notified items under Section 9(3) & 9(4) like GTA freight....
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...., legal services from advocates, security services (if applicable) and certain imports would attract RCM. Rest of the listed expenses fall under FCM. For discounts/rebates, maintain agreement, invoices, and credit notes as proof. Reply By Shilpi Jain: The Reply: The aspect of rebate and discount may have been asked to check if they could tax it as a service income for any additional activities ....
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..../ effort done/put in for the seller. Though if you can show that this discount or rebate is related to the trade of goods then no GST liability should attract. Reply By Shilpi Jain: The Reply: With regard to RCM you can inform the nature of the expenses to the officer and link them with the RCM notification to show that none of these are covered under it. Though pay attention to expenses like ....
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....freight and legal expenses. Shop rent if paid to unregistered person now will be RCM though this did not exist earlier. Reply By Harshaditya Kabra: The Reply: Expense RCM Applicability Notes Freight Yes (if GTA, i.e., Goods Transport Agency, by road) RCM applies at 12% GST if a consignment note is issued and service is by GTA. Recipient pays GST. Power & Fuel No Not under RCM u....
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....nless specific notified service is availed. Salary No Employment services are outside GST scope. Labour Charges Yes (if availed from unregistered supplier) If availed from unregistered vendor, RCM applies. Otherwise, if registered vendor charges GST, RCM doesnt apply. Staff Welfare No Unless the service availed falls under a notified RCM category. Insurance Yes (in specific c....
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....ases) RCM applicable if insurance agent provides services to an insurance co.. Traveling No (for regular booked tickets) Exception: If availing notified services (e.g., renting motor vehicle from non-body-corporate), see below. Conveyance No Normally not under RCM unless specific arrangements. Telephone No Telecom services generally under forward charge. Audit Fee Yes (if p....
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....aid to individual advocate/firm for legal services) Legal/advisory/consultancy by advocate firm, body corporate client pays under RCM. Audit (CA/CMA) not under RCM. Accounting No Not in RCM category. Legal Yes (see Audit Fee) Always clarify nature of "legal" service and vendor status. Miscellaneous Depends Only if service falls in notified RCM list. Shop, Bank Charges ....
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....No Unless related to notified services like recovery agent for banks. Printing & Stationery No Not under RCM unless it is a notified service (like service from author/copyright etc.) Reply By Ganeshan Kalyani: The Reply: I agree with the view of the experts. Most of the expenses mentioned in your query do not attract RCM applicability. <br> Discussion Forum - Knowledge Sharing ....