Sunday, May 15, 2022
RCM on Services received from Government

When a GST registered person receives a service from government such as renewal of factory license, GST under RCM on Services received from Government is applicable.
Relevant Section: Section 9 of CGST Act 2017
Relevant Notification: Notification No. 12/2017 – Central Tax (Rate) dated 28/06/2017 (Exemption Notification)
Relevant Notification: Notification No. 13/2017 – Central Tax (Rate) dated 28/06/2017 (RCM Notification)
Notification No. 13/2017 – Central Tax (Rate) dated 28/06/2017 (RCM Notification) issued under Section 9(3) of the CGST Act 2017 provides for payment of GST under RCM on Services received from Government.
Sl. No. | Category of Supply of Service | Supplier of Service | Recipient of Service |
5 | Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, - (1) renting of immovable property, and (2) services specified below- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers. | Central Government, State Government, Union territory or local authority | Any business entity located in the taxable territory. |
Exemptions: Notification No. 12/2017 – Central Tax (Rate) dated 28/06/2017 provides for exemptions to pay the tax under RCM. Relevant portion is stated below:
Sl. No. | Description of Service | Rate | Condition | |
9 | Chapter 99 | Services provided by Central Government, State Government, Union territory or a local authority where the consideration for such services does not exceed five thousand rupees: Provided that nothing contained in this entry shall apply to- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory. (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers: Provided further that in case where continuous supply of service, as defined in sub-section (33) of section 2 of the Central Goods and Services Tax Act, 2017, is provided by the Central Government, State Government, Union territory or a local authority, the exemption shall apply only where the consideration charged for such service does not exceed five thousand rupees in a financial year. | Nil | Nil |
47 | Heading 9983 or Heading 9991 | Services provided by the Central Government, State Government, Union territory or local authority by way of- (a) registration required under any law for the time being in force; (b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, including fire license, required under any law for the time being in force. | Nil | Nil |