Rcm on purchase from unregistered dealer

santosh (Querist) 01 July 2025 This query is : Resolved
If a Composite Registered Saw Mill purchase Timber from Unregistered Person or URD Dealer. Is RCM tax @18% will have to pay Saw mill dealer?

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This discussion clarifies whether a composite registered Saw Mill needs to pay 18% Reverse Charge Mechanism (RCM) tax when purchasing timber from an unregistered person or dealer (URD). The RCM mechanism requires the recipient (the Saw Mill) to pay GST directly to the government on behalf of the supplier. This applies to goods and services, especially when the supplier is unregistered or the transaction value is high. Expert advice suggests this is applicable in such scenarios.

kavksatyanarayana Online

(Expert) 01 July 2025
The supplier collects the tax from the recipient and remits it to the government. The recipient directly pays GST to the government on behalf of the supplier.RCM applies to goods and services and impacts registered and unregistered businesses. This mechanism is particularly applicable in cases where the supplier is an unregistered dealer or where the value of goods or services exceeds a specified threshold.

T. Kalaiselvan, Advocate (Expert) 02 July 2025
Well explained by expert Shri KAVK Satyanarayana Sir, you my follow the advise suggested.

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