1. Is RCM applicable to all purchases from unregistered suppliers?
No, Reverse Charge Mechanism (RCM) does not apply to all purchases from unregistered suppliers. RCM is applicable only on specific goods and services as notified by the government under GST law. Some common examples where RCM applies include services like rent from unregistered property owners, or purchases of raw materials in certain industries. If the unregistered supplier provides goods or services not covered under these notifications, RCM would not apply.
2. If an unregistered supplier has already provided a rent receipt, do we still need to issue a self-invoice?
Yes, even if the unregistered supplier has issued a rent receipt, you are required to generate a self-invoice as the recipient of the service. Under GST rules, the responsibility for paying tax under RCM lies with the recipient. The self-invoice is necessary to ensure proper documentation of the transaction and the corresponding tax liability.
3. How should RCM on commercial rent (after the recent amendment) be reported in GSTR-1 and GSTR-3B?
GSTR-1: RCM transactions, including those related to commercial rent, do not appear in GSTR-1 since this form is used for reporting outward supplies made by the supplier. Under RCM, the liability is on the recipient, so this is not reported here.
GSTR-3B: The GST payable under RCM for commercial rent should be declared in Table 3.1(d) – Tax on reverse charge basis in GSTR-3B. The GST rate for commercial rent under RCM is typically 18%. If you are eligible, you can claim Input Tax Credit (ITC) for the GST paid under RCM in Table 4(A)(3) of GSTR-3B.
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