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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 ServiceSupplier of ServiceRecipient of Service
5Services 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 authorityAny 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 ServiceRateCondition
9Chapter 99Services 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.
NilNil
47Heading 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.
NilNil

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