Find
Reverse charge applies to notified services such as GTA, legal services from advocates and services from directors, and to some goods. Scrutiny compares RCM paid with your expenses or with ITC claimed under RCM.
GST
RCM liability flagged in scrutiny
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Provisions
Sec 9(3), CGST Act 2017; Sec 61, CGST Act 2017; Sec 50, CGST Act 2017
Analysis
Go through your profit and loss account for GTA freight, legal fees, director sitting fees and similar heads. Example: Rs 6 lakh legal fees paid in a year means RCM of Rs 1.08 lakh at 18 percent. If unpaid, pay through DRC-03 in cash with interest; you can then claim it as ITC in a later return, subject to Sec 16(4) time limits and the rules for RCM credit.
Close
- Review expense ledgers for notified RCM services
- Compute RCM due and compare with RCM paid
- Pay shortfall in cash through DRC-03 with interest
- Explain in ASMT-11 and attach the computation
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