Reverse Charge Mechanism (RCM) List under GST- Goods and Services
GST15/05/2021 Source: GST
What is RCM:- Under GST, the supplier of goods or services is liable to pay tax. However, in specified cases like imports and other notified supplies, the liability to pay tax arises 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.
A list of RCM on Supply of Goods and Services indicating description of supply goods & services, category of the supplier/services provider and the recipient covered under RCM is following :-
List of Goods on which tax payable under Reverse Charge Mechanism (RCM)
| Description of Supply of Goods liable to RCM | Supplier of Goods under GST | Recipient of Goods under GST |
| Cashew nuts, not shelled or peeled | Agriculturist | Any registered person |
| Any person who manufactures silk yarn from raw silk or silk worm cocoon for supply of silk yarn | Agriculturist | Any registered person |
| Tobacco leaves | Agriculturist | Any registered person |
| Silk yarn | Any person who manufactures silk yarn from raw silk or silk worm cocoon for supply of silk yarn | Any registered person |
| Raw Cotton | Agriculturist | Any registered person |
| Supply of Lottery Ticket | State Govt, Union territory or local authority | Local distributor or Selling Agent |
| Used vehicles, seized and confiscated goods, old and used goods, waste and scrap | Central Government, State Government, Union territory or a local authority | Any registered person |
| Purchase of priority Sector Lending Certificate | Banks / Financial Institution | Any registered person |
| Purchase of Cement | Any Person | Promoter/Builder |
List of Services on which tax payable under Reverse Charge Mechanism (RCM)
| Description of Supply of Services liable to RCM | Services Provider under GST | Recipient of Services under GST |
| Services of Goods Transport Agency (GTA) [RCM on GTA not applicable if GTA opted for Forward Charge option 12%] | GTA | Any factory, society, co-operative society, registered person, body corporate, partnership firm, casual taxable person located in the taxable territory |
| RCM on Services of an arbitral tribunal to a business entity | An arbitral tribunal | Any business entity located in the taxable territory |
| RCM on Sponsorship services | Any Person | Anybody corporate or partnership firm located in the taxable territory |
| RCM on Legal Services of the advocate | An individual advocate including a senior advocate or firm of advocates | Any business entity located in the taxable territory |
| RCM on Director’s services ( except remuneration) | A director of a company or a body corporate | The company or a body corporate located in the taxable territory |
| RCM on Services of insurance Agent | An Insurance Agent | Any person carrying on insurance business, located in the taxable territory |
| RCM on Services of hiring of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration paid by service recipient(w.e.f. 01.10.2019) | Any person, other than a body corporate who supplies the service to a body corporate and does not issue an invoice charging central tax at the rate of 6 per cent. to the service recipient | Any body corporate located in the taxable territory |
| RCM on Services of lending of securities under (“Scheme”) of Securities and Exchange Board of India (“SEBI”), as amended(w.e.f. 01.10.2019) | Lender i.e. a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the Scheme of SEBI |
Borrower i.e. a person who borrows the securities under the Scheme through an approved intermediary of SEBI |
| RCM on Services of Recovery Agent | A Recovery Agent | A banking company or a financial institution or a non-banking financial company, located in the taxable territory |
| RCM on Services of overseas Committee | Members of Overseeing Committee constituted by the Reserve Bank of India | RBI |
| RCM on Services of 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 | Author or music composer, photograph her, artist, or the like | Publisher, music company, producer or the like, located in the taxable territory |
| RCM on Services by way of transfer of development rights or Floor Space Index (FSI) (including additional FSI) for construction of a project | Any Person | Promoter |
| Long term lease of land (30 years or more) against consideration in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name) and/or periodic rent for construction of a project | Any Person | Promoter |
| RCM on Services of an individual Direct Selling Agents (DSAs) | Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm | A banking company or a non-banking financial company, located in the taxable territory |
| RCM on Services of a business facilitator (BF) | Business Facilitator | A banking company, located in the taxable territory |
| RCM on Services of business correspondent (BC) | An agent of business correspondent |
A business correspondent, located in the taxable territory |
| RCM on Security services | An agent of business correspondent |
A registered person, located in the taxable territory |