Contents Covered
- Reverse Charge Mechanism
- GTA Services
- Legal Services
- Renting Residential Property
- Renting of any property, other than Residential property
- Services By Director
- Renting of Motor Vehicle
- RCM on Import of Services
- Conclusion
Reverse Charge Mechanism
Let us understand the meaning of Reverse Charge Mechanism (RCM) in simple words.
It simply means that the liability to pay tax is shifted to the buyer of the Product or services.
In general, the Seller is required to to collect the tax, but RCM is exactly the reverse of the same.
Let us understand the Applicability of RCM on various services
GTA Services
Goods Transport Agency provides Transportation services via road
Supplier
Goods Transport Agency
Recipient
Any person Registered under GST
Any Factory
Any Society
Any Body Corporate
Any Partnership Firm
Any casual taxable Person
Legal Services
Legal Services Provided by Lawyers as individual Lawyer or firm of Lawyers
Supplier
Individual Lawyer or Law Firm
Recipient
Any business entity
Renting of Residential Property
Services provided by way of renting of residential Property to a GST Registered person
Supplier
Any Person
Recipient
Any Person, registered under the GST
Renting of any property, other than Residential Property
Services provided by way of renting of commercial Property to a GST Registered person
Supplier
Any Person
Recipient
Any Person, registered under the GST
Services by Director
Services provided by the Director of a company to the company or to a body corporate in which he/she is the Director
Supplier
Director in the Company or Body Corporate
Recipient
The company or the Body Corporate
Renting of Motor Vehicle
Renting of Motor Vehicle, designed to carry passenger where the fuel cost is included in the total cost
Supplier
Any person, other than body corporate and make the supplies of the renting of motor vehicle to the body corporate and the GST is not charged @ 12%
Recipient
Any Body Corporate
RCM on Import of Services
Services Provided by any person, who is not situated in the taxable territory
Supplier
Any person, supplying services and is not situated in the taxable territory
Recipient
Any Person, registered in GST
Conclusion
RCM is one of the key are of GST, and it must be complied appropriately to avoid any penalty or interest or litigation.
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