ONE OF MY CLIENT IS COMPOSITION DEALER UNDER GST, HE IS PAYING FREIGHT AND SECURITY CHARGES , WHETHER RCM IS APPLICABLE. IF APPLICABLE THEN WHAT RATE OF GST , WE HAVE TO DISCHARGE GST RCM LIABILITY. THANKS

Reply—When GTA (registered or unregistered) provide service to a person registered in GST, 5% GST is applicable under RCM. Therefore, composition scheme dealer has to pay tax under Reverse Charge Mechanism for transportation service. Further no ITC is available for tax paid under reverse charge for a composition dealer.

As per notification No.29/2018-Central Tax (Rate) dated 31.12.2018, RCM is applicable on Security service. GST rate on Security service is 18% . So, w.e.f. 01.01.2019, if the supplier of Security service is any person other than body corporate, liability to pay GST will be of recipient instead of service provider.

Provided that nothing contained in this entry shall apply to, -

(i) (a) a Department or Establishment of the Central Government or State Government or Union territory; or

(b) local authority; or

(c) Governmental agencies;

which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or

(ii) a registered person paying tax under section 10 of the said Act.

Therefore, composition dealer is not liable to pay tax under reverse charge on security services.