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  7. What is Reverse Charge Mechanism (RCM) Under GST?

Reverse Charge Mechanism (RCM) Under GST

Updated on: 14 Oct, 2024 02:44 PM
Latest News:

Date: 20 May, 2021 | The Income Tax Department extends the following due dates - Income Tax Return filing date extended to 31st Dec,21 from 30th Sep 2021.
- Form-16 issue date extended to 31st July, 2021 from 15th June, 2021.
- TDS return for Q4 can now be filed till 30th June,21 instead of 31st May,21. Date: 01 May, 2021 | ITR last Date Filing of belated return and revised return for FY 2020-21 (AY 2021-222), has been extended from 30th Sep, 2021 to 31st Dec, 2021. Date: 24-10-2020 - The due date for filing Annual return in Form GSTR-9 and reconciliation statement in GSTR-9C for the F.Y. 2018-19 has been extended to 31st Decemeber 2020.

Contents

Who needs to disclose transaction relating to Reverse Charge in Annual Return – Supplier or Recipient?

The transaction covered under reverse charge needs to be declared both by the supplier and also by the recipient. The supplier of service, registered under GST , has to disclose the turnover on which recipient is liable to pay tax in table 5C of the Annual Return. And, the recipient needs to disclose the same in table 4G of the Annual Return

Is the reporting in Annual Return required if, credit has been taken in April 2018 for the GST paid under RCM for March 2018?

The Annual Return provides for reporting of credits which have been availed in the GST returns filed for FY 2017-18. Hence, only those credits which have been availed in the same financial year should be considered as part of input tax credit in the Table 6C and 6D.
However, as the RCM credit has been availed after completion of FY, it may be disclosed in the Table 13 of Part V.

Whether demand for e-way bill for Financial Year 2017-18, raised in FY 2018-19 needs to be disclosed in annual return.

No, as the same demand is issued by the adjudicating authority in the financial year of 2018-19. It need not to be disclosed in point no. 15E of form GSTR 9.

E-way bill system was not in vogue in FY 2017-18. As on date there is no specific reporting requirement of E-way Bill details in the Annual Return. Hence, nothing needs to be reported in this regard.
However, there could be possibility in the amendment in the format of Annual Return for FY 2018-19 wherein it is expected that e-way bill related information could also be demanded.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.