QUESTION

RCM UNDER SECTTION 9 (3) 1. If the transport rent of one parcel which is not more than 750, then we have to pay RCM under 9 (3)? 2. If there is not more than Rs 1500 in the amount charged for carrying the full loaded goods in a vehicle, then RCM has to be pay under 9 (3)? RCM UDER SECTION 9 (4) 1. Whether the RCM has to be payable under 9 (4) on the URD goods / service? 2.Please tell us the details of RCM from 01/07/2017 to 12/07/2019 3. We have a GST number and doing a business computer design, Should we have to pay RCM if we have a computer designer jobwork from an unregistered dealer? 4. We have a GST number. My business is Tiles Trading. If I buy a car vehicle for the use of this business then can it be taken after its input? 5. can we take ITC of car’s insurance premium ?

ANSWER

Point wise reply to your query is as follows: RCM UNDER SECTTION 9 (3)1. & 2. S. No. 21 of Notification No. 12/2017 Central tax (rate) is as follows:

21

Heading 9965
or
Heading 9967
 

Services provided by a goods transport agency, by way of transport in a goods carriage of -

(a) agricultural produce;
(b) goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;
(c) goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty;
(d) milk, salt and food grain including flour, pulses and rice;
(e) organic manure;
(f) newspaper or magazines registered with the Registrar of Newspapers;
(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
(h) defence or military equipments.

Nil

Nil

In view of aforesaid Notification you are not required to pay RCM u/s 9(3) in both the cases i.e. if transport rent of one parcel is not more than 750 and if the total amount for carrying full loaded vehicle does not exceed Rs 1500.

RCM UDER SECTION 9  (4)  SECTION 9 OF CGST ACT

(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.

1.& 2. Presently RCM u/s 9(4) is applicable only on supply of goods and services specified in Notification No.07/2019-Central Tax (Rate), dt. 29.03.2019 wef 01-04-2019(I.e. for Real estate service only) .

RCM from 01/07/2017 to 12/07/2019 is as follows:

Notification No.8/2017-Central Tax (Rate) exempts from reverse charge on inward supplies from Unregistered persons up to Rs.5000 per day till 13-10-2017. There after vide Notification No. 38/2017 ' Central Tax (Rate) RCM exemption shall apply to all registered persons without any limit till 31st day of March, 2018 which is now further extented till 30th day of September, 2019.For details please refer Notifications linked in Utility button of section 9 of CGST Act.

3. You are not required to pay RCM for computer designer jobwork from an unregistered dealer as the same is exempted till 30th day of September, 2019.
4. & 5. ITC is blocked under section 17(5) of CGST Act. Section 17(5) blocks ITC on except if used for purposes specified therein i.e.

(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:-
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;

SECTION 17 OF CGST ACT

(aa) vessels and aircraft except when they are used''
(i) for making the following taxable supplies, namely:-
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;

(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available-
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged- (I) in the manufacture of such motor vehicles, vessels or aircraft; or (II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;

Section 17(5) nowhere blocks ITC on vehicles used for transportation of goods.

In view of above ITC on purchase of car is not eligible as it is not used for purpose specified in section 17(5). Further as per Section 17(5) (ab) ITC of car’s insurance premium is also not allowed.