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RCM on Rent for Composite Dealer, Goods and Services Tax - GST

Issue Id: - 119423
Dated: 25-11-2024
By:- Praveen VR

RCM on Rent for Composite Dealer


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We have Clients who are composite dealers, hence cannot claim Input Tax Credit. With the RCM on Rent rule being incorporated, Should we still pay this (RCM on rent) without having any chance of adjustment against outward tax liability payment. If we pay this RCM payment, is there any chance of recovery or do we have an exemption for Composite dealers from paying RCM on rent

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Showing Replies 1 to 3 of 3 Records

Page: 1


1 Dated: 25-11-2024
By:- Sadanand Bulbule

Dear querist

The definition of " Input tax" under Section 2[62] [b], reproduced below, also includes tax payable under RCM.

(62) “input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes–

(a) XXXX

(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;

In view of such inclusive definition, the composition dealers opting to pay tax under Section 10 are not entitled either to recover it or exempt from paying rent under RCM. In fact, rent paid under RCM becomes the cost of establishment..


2 Dated: 26-11-2024
By:- KASTURI SETHI

Such availment of ITC by a composition dealer is clearly hit by Section 10 (4) of CGST Act. Pl. note the words, " __________nor shall  he be entitled to any credit of input tax." Emphasis is laid on the words, 'shall' & 'any'. The word, 'shall' stands for mandatory nature.

I fully support the views of Sh. Sadanand Bulbule, Sir


3 Dated: 27-11-2024
By:- Shilpi Jain

No exemption. Tax has to be paid under RCM and no credit would be eligible.


Page: 1

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