RCM on GST

The Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST) in India refers to the situation where the recipient of goods or services is liable to pay the GST instead of the supplier. This mechanism is applicable in specific cases as notified by the government, including certain transactions involving scrap. RCM on Scrap under GST in India: Applicability: RCM is applicable when a registered person (buyer) purchases scrap from an unregistered dealer. In this scenario, the buyer is responsible for paying GST on the purchase of scrap. Types of Scrap: Scrap materials can include metal scrap, plastic scrap, and other waste materials that are sold for recycling or further processing. GST Rates: The GST rate on different types of scrap can vary. For example, ferrous scrap generally attracts a GST rate of 18%. Compliance: The buyer must issue a self-invoice and pay the applicable GST directly to the government. The buyer can then claim an Input Tax Credit (ITC) for the tax paid under RCM.
Adv KL Gupta



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