Major Services under RCM & Rates

Here are the key services where Reverse Charge Mechanism (RCM) applies along with the common GST rates:

• Goods Transport Agency (GTA): If GTA opts to pay tax at 5% (without ITC), the recipient must pay 5% GST under RCM.
• Legal Services: Services provided by an individual advocate or legal firm are taxable under RCM at 18% (paid by the recipient business).
• Arbitral Tribunal Services: Recipients must pay 18% GST under RCM.
• Sponsorship Services: Any sponsorship services given to a body corporate or partnership firm attract 18% GST under RCM.
• Company Director Services: When a director provides services to their company, the company must pay 18% GST under RCM.
• Insurance Agent Services: Insurance companies must pay 18% GST under RCM on services received from insurance agents.
• Government Services (Selective): Certain services provided by Central/State Government or local authorities to business entities attract 18% GST under RCM (except exempt categories).

Major Goods under RCM & Rates

• Cashew, Tendu Leaves, Tobacco Leaves, Raw Cotton: When supplied by an agriculturist to a registered buyer, RCM applies. GST rate depends on the product.
• Used Vehicles, Confiscated Goods, Scrap: When sold by Government departments to registered buyers, RCM applies at the applicable GST rate.
• Office Rent (Government): If Government rents office space to a registered person, RCM applies at standard GST rate.

In short, under RCM, the rate remains the same as the normal GST rate, but the tax payment responsibility shifts from the supplier to the recipient.