On the recommendation of the 54th GST Council Meeting, the government has notified the reverse charge mechanism (RCM) on metal scraps.
Cases In Which RCM On Metal Scraps Is Applicable
Reverse Charge Mechanism (RCM) to be introduced on supply of metal scrap by unregistered person to registered person provided that the supplier shall take registration as and when it crosses threshold limit and the recipient who is liable to pay under RCM shall pay tax even if supplier is under threshold.
TDS Applicability
A TDS of 2% will be applicable on supply of metal scrap by registered person in B2B supply.
Significant Pointer
The Reverse Charge Mechanism (RCM) will be applicable on the supply of metal scrap by an unregistered person to a registered person.
Provided that the supplier shall take registration as and when it crosses the threshold limit.
The Registered Recipient will raise a Self Invoice u/s 31(3)(f) of the CGST Act.
Credit of GST paid under RCM by Such Registered Recipient is available (Section 16(2) of the CGST Act read with Rule 36(1)(b) of the CGST Rules).
Effective Date From Which RCM On Metal Scraps Will Be Applicable
The notification notifying RCM on metal scraps will be effective from 10 October 2024.
Notification Details
Notification No. 06/2024-Central Tax
Notification No. 25/2024-Central Tax
