{"id":23974,"date":"2023-01-31T14:37:06","date_gmt":"2023-01-31T09:07:06","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=23974"},"modified":"2023-03-12T00:52:17","modified_gmt":"2023-03-11T19:22:17","slug":"overview-on-goods-subject-to-reverse-charge-mechanism","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/","title":{"rendered":"Overview on Goods subject to reverse charge mechanism"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d619556a232\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d619556a232\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#Goods_subject_to_reverse_charge_mechanism_under_GST\" title=\"Goods subject to reverse charge mechanism under GST:\">Goods subject to reverse charge mechanism under GST:<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#List_of_Goods_subject_to_reverse_charge_mechanism_RCM_under_GST_law\" title=\"List of Goods subject to reverse charge mechanism (RCM) under GST law:\">List of Goods subject to reverse charge mechanism (RCM) under GST law:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#Brief_discussion_on_some_of_the_goods_subject_to_RCM\" title=\"Brief discussion on some of the goods subject to RCM:\">Brief discussion on some of the goods subject to RCM:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#RCM_on_Purchase_of_goods_from_Agriculturist\" title=\"RCM on Purchase of goods from Agriculturist:\">RCM on Purchase of goods from Agriculturist:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#RCM_on_Supply_of_lottery_tickets\" title=\"RCM on Supply of lottery tickets\">RCM on Supply of lottery tickets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#RCM_on_Priority_Sector_Lending_Certificate_PSLC\" title=\"RCM on Priority Sector Lending Certificate (PSLC)\">RCM on Priority Sector Lending Certificate (PSLC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#Four_specified_types_of_PSLC_include\" title=\"Four specified types of PSLC include:\">Four specified types of PSLC include:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#Levy_of_Goods_and_services_Tax_on_Priority_Sector_Lending_Certificate\" title=\"Levy of Goods and services Tax on Priority Sector Lending Certificate \">Levy of Goods and services Tax on Priority Sector Lending Certificate <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/overview-on-goods-subject-to-reverse-charge-mechanism\/#New_GST_Update_on_utilize_amount_in_cash_ledger_in_GST_law\" title=\"New GST Update: on utilize amount in cash ledger in GST law\u00a0\">New GST Update: on utilize amount in cash ledger in GST law\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-23977\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/Goods-subject-to-reverse-charge-mechanism..png\" alt=\"Goods subject to reverse charge mechanism.\" width=\"1200\" height=\"553\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/Goods-subject-to-reverse-charge-mechanism..png 1200w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/Goods-subject-to-reverse-charge-mechanism.-300x138.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/Goods-subject-to-reverse-charge-mechanism.-1024x472.png 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/Goods-subject-to-reverse-charge-mechanism.-768x354.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/Goods-subject-to-reverse-charge-mechanism.-800x369.png 800w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Goods_subject_to_reverse_charge_mechanism_under_GST\"><\/span><span style=\"color: #000080;\">Goods subject to reverse charge mechanism under GST:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The supply of goods subject to reverse charge mechanism (RCM) where the recipient is needed to pay GST, have been notified vide\u00a0Central Board of Indirect Taxes &amp; Customs Notification No. 4\/2017 dated 28 June 2017\u00a0U\/s 9(3) of the Central Goods and Services Tax Act, 2017.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"List_of_Goods_subject_to_reverse_charge_mechanism_RCM_under_GST_law\"><\/span><span style=\"color: #000080;\">List of Goods subject to reverse charge mechanism (RCM) under GST law:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The list of notified goods on which GST is needed to be paid under reverse charge is given below along with date from which reverse charge provisions are applicable on such goods. These goods are also notified for reverse charge under other Goods and services Tax Acts(s).<\/p>\n<table style=\"height: 1538px;\" width=\"802\">\n<tbody>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Sr No.<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Goods Description<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Goods Supplier<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Recipient of Goods<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><strong>1<\/strong><\/td>\n<td>Cashew nuts, not shelled or peeled<br \/>\n(RCM applicable from 01.07.2017).<\/td>\n<td>Agriculturist<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<tr>\n<td><strong>2<\/strong><\/td>\n<td>Bidi wrapper leaves<br \/>\n(tendu)<br \/>\n(RCM applicable from 01.07.2017).<\/td>\n<td>Agriculturist<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<tr>\n<td>3<\/td>\n<td>Tobacco Leaves<br \/>\n(RCM applicable from 01.07.2017).<\/td>\n<td>Agriculturist<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<tr>\n<td>4<\/td>\n<td>Raw cotton<br \/>\n(RCM applicable from 15.11.2017\u00a0vide Central Board of Indirect Taxes &amp; Customs\u00a0N.N.\u00a043\/2017-CT(R) dated 14.11.2017)<\/td>\n<td>Agriculturist<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<tr>\n<td><strong>5<\/strong><\/td>\n<td>Silk yarn<br \/>\n(RCM applicable from 01.07.2017).<\/td>\n<td>Agriculturist<\/td>\n<td>Any person who manufactures silk yarn from raw silk \/ silk worm cocoons for supply of silk yarn<\/td>\n<\/tr>\n<tr>\n<td>6<\/td>\n<td>Supply of lottery<br \/>\n(RCM applicable from 01.07.2017).<\/td>\n<td>State Government,<br \/>\nUnion Territory or any local authority<\/td>\n<td>Lottery distributor or selling agent<\/td>\n<\/tr>\n<tr>\n<td><strong>7<\/strong><\/td>\n<td>Used vehicles , seized and confiscated goods, old and used goods , waste and scrap.<br \/>\n(RCM applicable from 13.10.2017\u00a0vide\u00a0Central Board of Indirect Taxes &amp; Customs N.N. 36\/2017-CT(R) dated 13.10.2017)<\/td>\n<td>Central \/ State Government,<br \/>\nUnion Territory or<br \/>\na local authority<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<tr>\n<td><strong>8<\/strong><\/td>\n<td>Priority Sector Lending<br \/>\nCertificate<br \/>\n(RCM applicable from 28.05.2018\u00a0vide\u00a0Central Board of Indirect Taxes &amp; Customs N.N. 11\/2018-CT(R) dated 28.05.2018)<\/td>\n<td>Any registered person<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<tr>\n<td>9<\/td>\n<td>Following essential oils other than those of citrus fruit namely:<br \/>\na) of peppermint (menthapiperita)<br \/>\nb) Of other mints: Spearmint oil, watermint oil, Horsemint oil, Bergament oil.<br \/>\n(RCM applicable w.e.f 01.10.2021 vide\u00a0Central Board of Indirect Taxes &amp; Customs N.N 10\/2021-CT(R) dated 30.09.2021.<\/td>\n<td>Any unregistered person<\/td>\n<td>Any registered person<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Brief_discussion_on_some_of_the_goods_subject_to_RCM\"><\/span><span style=\"color: #000080;\">Brief discussion on some of the goods subject to RCM:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"RCM_on_Purchase_of_goods_from_Agriculturist\"><\/span><span style=\"color: #000080;\">RCM on Purchase of goods from Agriculturist:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-23978\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Purchase-of-goods-from-Agriculturist.png\" alt=\"RCM on Purchase of goods from Agriculturist\" width=\"903\" height=\"536\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Purchase-of-goods-from-Agriculturist.png 903w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Purchase-of-goods-from-Agriculturist-300x178.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Purchase-of-goods-from-Agriculturist-768x456.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Purchase-of-goods-from-Agriculturist-800x475.png 800w\" sizes=\"(max-width: 903px) 100vw, 903px\" \/><\/p>\n<p>Out of eight goods wherein RCM is applicable on five goods , if purchased by GST Registered person from an agriculturist. So it is essential to understand the meaning of \u2018Agriculturist\u2019.<\/p>\n<p>It should be noted that the term &#8220;agricultural&#8221; does not have a meaning under the GST law, but the term &#8220;agriculturist&#8221; does. Generally, the term &#8220;agricultural&#8221; is understood very broadly in commercial jargon to also cover post-harvesting activities. Horticulture, sericulture, and floriculture should all be included in further agriculture. It does not, But cover animal rearing.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"RCM_on_Supply_of_lottery_tickets\"><\/span><span style=\"color: #000080;\">RCM on Supply of lottery tickets<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>According to the as per Schedule III of the Central Goods and Services Tax Act, 2017. The \u2018Lottery tickets\u2019 is an actionable claim &amp; is classified as \u2018Goods\u2019, under Goods and Services tax. But an actionable claim other than betting, lottery &amp; gambling has been kept outside scope of supply.<\/p>\n<p>So lottery tickets Sale would be considered to be the\u00a0supply of taxable goods\u00a0and will attract Goods and Services Tax.<\/p>\n<p><span style=\"color: #000080;\"><strong>Payment of GST under reverse charge:<\/strong><\/span><\/p>\n<ul>\n<li>When a state govt is running a lottery, the state govt sells the tickets to a lottery distributor or selling agent. Reverse charge compels the selling agent to pay tax.<\/li>\n<li>Consequently, no tax is due when selling agent delivers such tickets to sub-agent\/customer. Local sub-agents are likewise exempt from paying taxes. As a result, in the case of a state govt -run lottery, a tax is imposed at a single location under the reverse charge system.<\/li>\n<li>Nevertheless, in the case of lottery authorised by State Govt, the tax is to be paid by the lottery selling agent under the upfront charge. At each and every stage of supply, a tax is also paid.<\/li>\n<li>On all lotteries, there is an uniform GST rate of 28%.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"RCM_on_Priority_Sector_Lending_Certificate_PSLC\"><\/span><span style=\"color: #000080;\">RCM on Priority Sector Lending Certificate (PSLC)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>What is the PSLC?<\/strong><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-23979\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Priority-Sector-Lending-Certificate-PSLC.jpeg\" alt=\"RCM on Priority Sector Lending Certificate (PSLC)\" width=\"1017\" height=\"589\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Priority-Sector-Lending-Certificate-PSLC.jpeg 1017w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Priority-Sector-Lending-Certificate-PSLC-300x174.jpeg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Priority-Sector-Lending-Certificate-PSLC-768x445.jpeg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/01\/RCM-on-Priority-Sector-Lending-Certificate-PSLC-800x463.jpeg 800w\" sizes=\"(max-width: 1017px) 100vw, 1017px\" \/><\/p>\n<p>Priority Sector lending certificate are tradable instruments issued as certificates against priority sector lending by Nationalized or Private sector banks. The certificates help banks to meet their lending goals specified for the priority sector. Buyers of Priority Sector Lending Certificate are generally those Nationalized or Private sector banks who are not able to meet there needed target of lending priority sector. So, Nationalized or Private sector banks moving ahead of their targets issues Priority Sector Lending Certificate to non-achievers to balance the flow of lending and credit.<\/p>\n<p>PSLC (Priority Sector Lending Certificate) are issued only between Nationalized or Private sector banks and the risk on account of credit made by over-performing Nationalized or Private sector banks, does not transfer with the issue of certificates to other Nationalized or Private sector banks.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Four_specified_types_of_PSLC_include\"><\/span><span style=\"color: #000080;\"><strong>Four specified types of PSLC include:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Priority Sector Lending Certificate Agriculture:\u00a0Priority Sector Lending Certificate issued for agriculture sub lending target.<\/li>\n<li>The Priority Sector Lending Certificate Micro Enterprises: Priority Sector Lending Certificate issued for Micro-enterprises sub lending target<\/li>\n<li>Priority Sector Lending Certificate Small and Marginal farmers: Priority Sector Lending Certificate issued for Small and Marginal farmers sub lending target<\/li>\n<li>The Priority Sector Lending Certificate General: Priority Sector Lending Certificate issued for correspondingly balancing the overall lending target.<\/li>\n<\/ul>\n<p>Priority Sector Lending Certificate issued by Nationalized or Private sector banks does not transfer any risk, loan assets, interest or any right, hence,\u00a0Priority Sector Lending Certificate does not fall under the definition of securities. They have an intrinsic value of their own and are to be taxed at general rates like other taxable goods under Goods and services Tax.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Levy_of_Goods_and_services_Tax_on_Priority_Sector_Lending_Certificate\"><\/span><span style=\"color: #000080;\"><strong>Levy of Goods and services Tax<\/strong><strong> on Priority Sector Lending Certificate <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>As per\u00a0Central Board of Indirect Taxes &amp; Customs Circular No.62\/36\/2018-GST dated 12.09.2018\u00a0clarified that Goods and services Tax on Priority Sector Lending Certificate starting from period 1 July 2017 to 27 May 2018 will be paid by the seller bank on a forward charge basis at the rate of 12 percentage. Whereas from 28 May 2018 onwards, the charge would be paid by the buyer bank on\u00a0RCM<\/li>\n<li>The trade of Priority Sector Lending Certificate among Nationalized or Private sector banks will be considered as an Inter-state supply, so Integrated Goods and Services Tax is payable on such transactions.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"New_GST_Update_on_utilize_amount_in_cash_ledger_in_GST_law\"><\/span><span style=\"color: #000080;\"><strong>New GST Update: on utilize amount in cash ledger in GST law\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The option to utilize amount in cash ledger of one Goods &amp; Services Tax Identification No by another Goods &amp; Services Tax Identification No (entities having same Permanent Account No) by way of transfer through form PMT-09 has been made effective in Goods and Services Tax\u00a0portal.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Goods subject to reverse charge mechanism under GST: The supply of goods subject to reverse charge mechanism (RCM) where the recipient is needed to pay GST, have been notified vide\u00a0Central Board of Indirect Taxes &amp; Customs Notification No. 4\/2017 dated 28 June 2017\u00a0U\/s 9(3) of the Central Goods and Services Tax Act, 2017. List of &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[2464,503,2653],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/23974"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=23974"}],"version-history":[{"count":3,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/23974\/revisions"}],"predecessor-version":[{"id":24197,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/23974\/revisions\/24197"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=23974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=23974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=23974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}