RCM Liability under GST- RCM ITC utilisation

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....CM Liability under GST- RCM ITC utilisation<br> Query (Issue) Started By: - Chandrasekar Duraisamynaidu Dated:- 9-3-2026 Last Reply Date:- 14-3-2026 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>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. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Query: When purchase whether RCM is applicable for him Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: 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. Reply By Sadanand Bulbule: T....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he Reply: Reply is welcomed. Reply By Shilpi Jain: The Reply: Metal scrap falling under these Chapters 72, 73, 74, 75, 76, 77, 78, 79, 80 or 81 - is liable under RCM, if the purchase is from an unregistered person by your registered client. Reply By Ryan Vaz: The Reply: RCM Applicability (Post Budget 2024 Amendment): Yes, RCM is applicable. As per Notification No. 06/2024-Central Tax (R....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ate) dated 08.10.2024, effective 10.10.2024, purchase of scrap from unregistered persons is liable to GST under Reverse Charge Mechanism u/s 9(3) of the CGST Act. This covers metal scrap including ferrous/non-ferrous items (HSN 7204, 7404, 7503, etc.). GST is payable @18% (CGST 9% + SGST 9%) via a self-invoice issued under Section 31(3)(f). The registered scrap dealer must: 1. Issue a self-invo....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ice for each purchase from an unregistered B2C seller. 2. Discharge GST in cash via GSTR-3B for the RCM liability. 3. Report inward RCM supplies in Table 3.1(d) of GSTR-3B. ITC on RCM Paid: Under Section 16 read with Section 41 of the CGST Act, ITC on RCM is available in the same tax period in which the tax is actually paid in cash - not merely on accrual. This ITC can be set off against ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....output GST liability (CGST/SGST/IGST) as per the priority rules under Section 49. ITC is admissible provided: - Goods are used for furtherance of business. - Self-invoice is properly issued and retained. - RCM liability has been paid in cash in GSTR-3B. Since the dealer sells scrap to B2B and B2C customers as a registered person, the RCM ITC is fully available for offset against output liabilit....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y, neutralising the cash impact in the same period. Recommendation: Maintain purchase records with seller details (PAN/Aadhaar where available) and issue self-invoices promptly to avoid interest exposure under Section 50.<br> Discussion Forum - Knowledge Sharing ....