Reverse Charge Mechanism (RCM) is a mechanism under GST where the recipient of the goods or services is liable to pay tax instead of the supplier. RCM is applicable in specific scenarios and on specific goods and services. In this article, we will discuss the RCM under GST on Security, Advocate, Transport Residential Rent Services.
Security services are essential for most businesses and individuals. It is mandatory for businesses to hire security personnel to ensure the safety and security of their premises as well as their employees. Security services fall under the category of services that are subject to RCM under GST.
As per the GST Act, security services provided by any person other than a body corporate to a registered person are subject to RCM under GST. This means that the recipient of the services, i.e., the registered person, has to pay the GST on the security services directly to the government.
Advocate services are also subject to RCM under GST. In the case of legal services provided by an advocate, if the recipient of the services is a business entity, then RCM is applicable. This means that the business entity, i.e., the recipient of the services, has to pay the GST directly to the government.
However, if the recipient of the services is an individual, then RCM is not applicable. In such cases, the advocate providing the services has to pay the GST on the services provided.
Transport services are another category of services that are subject to RCM under GST. Under the GST Act, transportation of goods by road provided by a goods transport agency to a registered person is subject to RCM. This means that the recipient of the services, i.e., the registered person, has to pay the GST directly to the government.
However, if the goods transport agency is a registered person under GST, then RCM is not applicable. In such cases, the goods transport agency has to pay the GST on the services provided.
Residential rent services provided by an individual or a Hindu Undivided Family (HUF) are exempt from GST. However, if the landlord is a body corporate, then RCM is applicable. This means that the recipient of the services, i.e., the tenant, has to pay the GST directly to the government.
It is important to note that RCM under GST is applicable only if the recipient of the services is a registered person under GST. If the recipient is not registered under GST, then RCM is not applicable.
RCM under GST is applicable on specific goods and services and in specific scenarios. Security services, advocate services, transport services, and residential rent services are some of the services that are subject to RCM under GST. It is important for businesses to understand the implications of RCM under GST and comply with the regulations to avoid any penalties or legal action.
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