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Showing posts from August, 2017

REVERSE CHARGE MECHANISM (RCM)

After the implementation of GST there are lots of confusions arises among the common people, traders, business man and manufacturer about the taxation system, the main confusion surrounded between the two taxation terms that is input tax credit and reverse charge mechanism (RCM). As our GST rule all we know in a business, if the annual turnover in a financial year is within Rs 20 lakh (Rs10 lakh for north eastern and hill states) then he have not required paying GST. But the confusion arises when the rule is going to the market. From the earlier discussion  How GST works it was shown that the whole GST process is actually a chain system. That means if manufacturer pay GST when he buy inputs and wholesaler buy the finished product with the proper GSTN(GST registration number),then wholesaler are eligible to claim input tax credit from the government. The Indian industrial sector are divided two parts organized sector and unorganized sector. Many big industrial secto...