What is RCM in GST and on which goods and services it is applicable

In India, under the Goods and Services Tax (GST) regime, the Reverse Charge Mechanism (RCM) is a system where the recipient of goods or services is liable to pay GST instead of the supplier. RCM is applicable in specific scenarios as defined under the GST law. As of my last update in January 2022, here are the goods and services on which RCM is applicable in India:

  1. Services from Unregistered Dealers to Registered Dealers: When a registered person procures services from an unregistered supplier, the liability to pay GST shifts to the recipient under RCM. This provision ensures that tax is paid even if the supplier is not registered under GST.
  2. Specified Goods and Services: The government has specified certain goods and services on which RCM applies. These include:
  3. Goods Transport Agency (GTA) Services: Transportation of goods by road through a goods transport agency when the supplier is a GTA.
  4. Legal Services: Services provided by an advocate (including a senior advocate) or a firm of advocates.
  5. Insurance Agent Services: Services provided by an insurance agent to any person carrying on insurance business.
  6. Goods and Services Provided by an Authorised E-commerce Operator: In cases where an e-commerce operator is liable to pay GST on behalf of the supplier under Section 9(5) of the CGST Act, 2017.
  7. Certain Specified Goods: The government may notify certain goods on which RCM is applicable. This is done to prevent tax evasion or to ensure compliance.

It’s important to note that the list of goods and services subject to RCM may be updated by the government from time to time. Therefore, businesses need to stay updated with the latest notifications and amendments issued by the GST authorities. If you are facing any issues in RCM in GST, you can contact us for further information. We provide Best GST Services in Gurgaon.

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