RCM for sand and jelly purchase -URD, Goods and Services Tax - GST

[Rajaraman Iyer]

Sir/s,

My client is a contractor who purchases ready mix concrete. However for some works, he needs to procure sand, jelly from unregistered dealers. Amounts are paid by crossed cheques. However the taxability under GST by discharging tax under RCM is under question. I request for clarification, if we have to pay GST @ 5% under RCM and claim tax credit under ITC? though the GST circular on RCM does not specify these items, this practice is being followed by some of his co-businessmen.

Posts / Replies

[CAVenkataprasad Pasupuleti]

There is no GST liability on such items under RCM if procured from unregistered vendors.

If he pays, the same can be availed as ITC.

[KASTURI SETHI]

I support the views of Sh. CAVenkataprasad Pasupuleti Ji. Section 9(4) of CGST Act has been replaced vide S.4 of CGST (Amendment) Act, 2018 w.e.f. 1.2.19. Only specified categories of goods or services or both from unregistered suppliers are to be taxed under RCM. Registered persons are also to be notified for payment of tax under RCM.

Both of the goods mentioned by you have not specified under RCM under Section 9(4) of CGST Act so far..