What is Reverse Charge Mechanism (RCM) under GST?

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Sakshi Shah

GST
ITC
Reverse Charge Mechanism

Under any tax regime, a seller is liable to pay tax to the government. In GST, the supplier of goods or services collects GST from the buyer and pays it to the GST department while filing the GST Return. Under Reverse Charge Mechanism (RCM) in GST, the buyer is liable to pay GST to the government. It is applicable on sale of notified goods and services or specified situations.

When is Reverse Charge Mechanism applicable under GST?
Read about the situations when reverse charge mechanism under GST is applicable and buyer needs to deposit GST instead of the seller
Read More
When is Reverse Charge Mechanism applicable under GST?
Read about the situations when reverse charge mechanism under GST is applicable and buyer needs to deposit GST instead of the seller
Read More

Normal Mechanism

Reverse Charge Mechanism (RCM)

GST under Reverse Charge Mechanism

FAQs

How can a buyer pay GST under reverse charge if he/she does not have a GST registration?

If a person is required to pay GST as per the provisions of the reverse charge mechanism, it is compulsory to take registration irrespective of the turnover. The threshold limit of Rs.20 lacs is not applicable in these cases.

Can I claim Input Tax Credit of the tax paid under the Reverse Charge Mechanism?

If the buyer has paid GST under reverse charge, he can claim the input tax credit of the tax paid if he/she has satisfied all conditions to claim ITC. The Input Tax Credit can be claimed by the buyer and not seller.

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