Summary of Introduction of RCM and GST TDS on Metal scrap supplies
GST Notification No 24/2024 & 25/2024 of Central tax is related to Introduction of RCM and GST TDS on Metal scrap supplies. The Government has introduced RCM in case of supply of metal scrap by unregistered person to registered person with effect from 10-10-2024. Additionally TDS of 2% will also applicable in case of B2B transactions.
- From 10-10-2024, RCM will apply on the supply of Metal scrap by an unregistered person to the registered person. The Recipient will be responsible for paying GST on this transaction, even if the supplier has not exceeded the threshold limit. Once the supplier crosses the threshold limit, then the supplier will be liable to pay the GST under FCM, and the recipient will no longer be responsible for paying the GST under RCM.
- The Government issued Notification No 25/2024 for the implementation of the TDS provision for registered recipients of metal scrap. The registered person who receives the metal scrap under chapters 72 to 81 of Custom Tariff Act must deduct tax at source when making payment to registered suppliers. A TDS of 2% will be applicable on the supply of metal scrap by registered persons in B to B supply.
