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, -	Central Government, State Government, Union territory or local authority	Any business entity located in the taxable territory.
	(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.

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:	Nil	Nil
		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.
47	Heading 9983	Services provided by the Central Government, State Government, Union territory or local authority by way of-	Nil	Nil
	or	(a) registration required under any law for the time being in force;
	Heading 9991	(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.