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𝗥𝗲𝘃𝗲𝗿𝘀𝗲 𝗖𝗵𝗮𝗿𝗴𝗲 𝗨𝗻𝗱𝗲𝗿 𝗚𝗦𝗧 𝗪𝗵𝘆 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗦𝗼𝗺𝗲𝘁𝗶𝗺𝗲𝘀 𝗣𝗮𝘆 𝘁𝗵𝗲 𝗧𝗮𝘅

𝗬𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗺𝗮𝘆 𝗵𝗮𝘃𝗲 𝘁𝗼 𝗽𝗮𝘆 𝗚𝗦𝗧 𝗲𝘃𝗲𝗻 𝘄𝗵𝗲𝗻 𝘆𝗼𝘂𝗿 𝘀𝘂𝗽𝗽𝗹𝗶𝗲𝗿 𝗱𝗼𝗲𝘀 𝗻𝗼𝘁 𝗰𝗵𝗮𝗿𝗴𝗲 𝗶𝘁.

For growing businesses, overlooking 𝗥𝗲𝘃𝗲𝗿𝘀𝗲 𝗖𝗵𝗮𝗿𝗴𝗲 𝗠𝗲𝗰𝗵𝗮𝗻𝗶𝘀𝗺 (𝗥𝗖𝗠) can lead to tax demands, interest and compliance issues.

𝗪𝗵𝗲𝗻 𝗗𝗼𝗲𝘀 𝗥𝗖𝗠 𝗔𝗽𝗽𝗹𝘆?

𝟭. 𝗡𝗼𝘁𝗶𝗳𝗶𝗲𝗱 𝗚𝗼𝗼𝗱𝘀 𝗮𝗻𝗱 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 – 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟵(𝟯)

For specified supplies, the recipient pays GST instead of the supplier.

𝗙𝗼𝗿 𝗲𝘅𝗮𝗺𝗽𝗹𝗲, a Chennai manufacturer receiving legal services from an individual advocate or firm of advocates may have to pay GST under RCM, subject to applicable conditions.

𝟮. 𝗣𝘂𝗿𝗰𝗵𝗮𝘀𝗲𝘀 𝗳𝗿𝗼𝗺 𝗨𝗻𝗿𝗲𝗴𝗶𝘀𝘁𝗲𝗿𝗲𝗱 𝗦𝘂𝗽𝗽𝗹𝗶𝗲𝗿𝘀 – 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟵(𝟰)

RCM does not apply automatically to every purchase from an unregistered supplier.

It applies only to notified classes of registered recipients and specified supplies, such as certain real-estate promoter transactions.

A Tiruppur textile business buying goods from an unregistered vendor should not assume RCM applies merely because the vendor is unregistered.

𝟯. 𝗘-𝗖𝗼𝗺𝗺𝗲𝗿𝗰𝗲 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 – 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟵(𝟱)

For notified services supplied through an electronic commerce operator, the operator is liable to pay GST.

Examples include specified passenger transport, accommodation and housekeeping services, subject to notification conditions.

Where an overseas operator has no physical presence in India, its representative—or a person appointed for tax payment—may be responsible.

𝗪𝗵𝗮𝘁 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗢𝘄𝗻𝗲𝗿𝘀 𝗦𝗵𝗼𝘂𝗹𝗱 𝗗𝗼

Review expense ledgers for RCM transactions, verify supplier status and relevant notifications, ensure timely cash payment of RCM tax, and claim eligible input tax credit subject to GST conditions.

𝗧𝗮𝗸𝗲 𝗔𝗰𝘁𝗶𝗼𝗻

Ask your finance team to conduct a quarterly RCM review across all branches and business activities.

Early identification protects cash flow and reduces avoidable disputes.

𝗖𝗔 𝗦𝗮𝗶𝗹𝗲𝘀𝗵 𝗕𝗵𝗮𝗻𝗱𝗮𝗿𝗶

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