Reverse charge mechanism under GST. Supply of Goods under RCM and description of nine supply of services covered under RCM-CBEC Paper.
Generally, the supplier of goods or services is liable to pay GST. However, in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.
There are two type of reverse charge scenarios provided in law. First is dependent on the nature of supply and/or nature of supplier. This scenario is covered by section 9 (3) of the CGST/ SGST (UTGST) Act and section 5 (3) of the IGST Act. Second scenario is covered by section 9 (4) of the CGST/SGST (UTGST) Act and section 5 (4) of the IGST Act where taxable supplies by any unregistered person to a registered person is covered.
Supplies of goods under reverse charge mechanism:
- Cashew nuts, not shelled or peeled
- Bidi wrapper leaves (tendu)
- Tobacco leaves
- Supply of lottery
- Silk yarn
Supplies of services under reverse charge mechanism:
- GTA Services
- Legal Services by advocate
- Services supplied by an arbitral tribunal to a business entity
- Services provided by way of sponsorship to anybody corporate or partnership firm
- Services supplied by the Central Government, State Government, Union territory or local authority to a business entity.
- Services supplied by a director of a company or a body corporate to the said company or the body corporate
- Services supplied by an insurance agent to any person carrying on insurance business
- Services supplied by a recovery agent to a banking company or a financial institution or a non-banking financial company.
- Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under section 13(1)(a) of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like.
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With the introduction /roll out of GST check posts are being abolished in 22 States. Another 8 are in the process.
All Invoices can be generated manually also, not required to be generated online on Internet.
Internet connection is need only once in a month for filing the Returns.
Provisional Id is the GSTN
New Business Registrations to be done within 30 days.
One Return every month with 3 parts. One is to be filled by the Dealer and the 2 other parts are auto populated.
Small Traders dealing with B2C need to file a Summary of Total Sales
GST rate is higher because previously excise duty and other taxes were not visible, now it is visible.
All the existing Taxpayer under VAT, Service Tax and Central Excise, you can enroll yourself till next 3 months.
On the registration of businesses, all the subsumed tax assesees, have migrated to the GST Network. Registration, which closed on June 15, will reopen on June 25. The provisional ID number will be the same for GSTIN (GST identification number). New businesses too need not rush. They will have 30 days for GSTIN.
Under The GST, the biggest tax reform in India’s history will require firms to file three online returns each month. Some business lobby groups have urged a delay to the rollout to allow more time to get ready.
The government relaxed the filing dates it will allow companies to file late returns for the first two months so that they can adapt to a new online filing system.
The GST Council considered the revision of tax on hotel rooms and decided that while those in the range of Rs 2,000-Rs 7,500 a day tariff would face 18 per cent tax, rooms with daily tariff above Rs 7,500 would be taxed at 28 per cent. Restaurant service in 5-star hotels would attract 18 per cent tax.
Prices of consumer electronics are likely to go up by 3-5 per cent once GST is implemented as most of them fall under the 28 per cent tax slab, which is the highest bracket and a jump from the current 23 per cent tax rate.
Most retailers have announced these discounts in a bid to clear inventories ahead of the GST rollout. As per the GST the Input Credit to be utilised within one year of purchase.
Reiterating that preparations are in full swing for rolling out GST on Jul 1, CBEC said that, along with the states, the department has increased its outstretch programmes on the forthcoming Indirect tax regime to reach the “last trader”.
Some GSPs urged the GSTN to defer the date by which business taxpayers must file invoices by at least a month from August to September, to allow GSPs to carry out testing and security compliance based on revised rules.
Positive Impact: FMCG, consumer durables, tourism, aviation, DTH cable, lubricants, laminates under building materials
Negative Impact: Luxury hotels, theme parks, luggage, breweries and distilleries, upstream and downstream oil sector
Neutral Impact: Auto, cement, banking, Agri chemicals, power and pharma