Notified Goods Under Reverse Charge Mechanism (RCM)

Under the reverse charge mechanism (RCM), the recipient of goods or services is liable to pay the GST instead of the supplier. In other words, the liability to pay GST is shifted from the supplier to the recipient. RCM is applicable in certain cases where the supplier is not required to be registered under GST or where the supplier is a registered person but the goods or services supplied are notified under RCM.

Notified Goods

The Central Board of Indirect Taxes and Customs (CBIC) has notified certain goods and services under the Reverse Charge Mechanism (RCM). These goods and services are notified under Section 9(3) and Section 9(4) of the Central Goods and Services Tax (CGST) Act, 2017. The following are the notified goods under RCM:

• Raw cotton


• Skimmed milk powder


• Unbranded namkeen


• Unbranded ayurvedic, unani, siddha, and homeopathy medicines


• Legal services

Impact of Notified Goods under RCM

The recipient of these goods or services is liable to pay GST under RCM. The recipient must ensure that the supplier has not charged GST on the invoice. The recipient must also ensure that the supplier is not registered under GST. If the supplier is registered under GST, then the recipient cannot avail of the RCM benefit.

Conclusion

Notified goods under RCM are a list of goods and services that are notified by the CBIC under Section 9(3) and Section 9(4) of the CGST Act, 2017. The recipient of these goods or services is liable to pay GST under RCM. The RCM is applicable in certain cases where the supplier is not required to be registered under GST or where the supplier is a registered person but the goods or services supplied are notified under RCM. It is important for the recipient to ensure that the supplier has not charged GST on the invoice and is not registered under GST to avail of the RCM benefit.