Forward Charge for Indian Railways starting from 20-10-2023
Government has issued the Notification No 14/2023 for Forward Charge for Indian Railways starting from 20-10-2023.
To cover the supply from Indian railway under the Forward Charge mechanism, the Government has amend the Notification no 13/2017-Central Tax (Rate) dated 28-06-2017.
RCM is applicable on the service provided by government to business entity but for service related to renting of immovable property, postal service, service by ministry of Railway, service related to airplane or ship whether outside or inside the area of port or an airport, transportation of goods or passengers RCM will not applicable. FCM will apply on such services.
Central Government excluding the Ministry of Railways (Indian Railways), state government , Union Territory or local authority supplies the service related to renting of Immovable property to any person registered under CGST Act 2017 liable for RCM.
Government has amend the Notification No.04/2017-Central tax (Rate) dated 28-06-2017 effective from 20-10-2023 with following:
Before the amendment | After the amendment (effective from 20-10-2023) |
If Central government, state government , Union Territory, local authority supplied any Used vehicles, seized and confiscated goods, old and used goods, waste and scrap to any registered person RCM is applicable on such transactions. | If Central government (Excluding Ministry of Railways (Indian Railways), state government or Union Territory or local authority supplied any Used vehicles, seized and confiscated goods, old and used goods, waste and scrap to any registered person RCM is applicable on such transactions. |
RCM will not applicable to ministry of Railways if it supplied used vehicles, seized and confiscated goods, old and used goods, waste and scrap to any registered person as Indian Railway is out of the purview of RCM. FCM will applicable to Indian Railways.
