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Table of Contents
[F. No. 354/428/2018- TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 31st December, 2018
Notification No. 29/2018 - Central Tax (Rate): Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to specify services to be taxed under Reverse Charge Mechanism (RCM) as recommended by Goods and Services Tax Council in its 31st meeting held on 22.12.2018.
GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
GSR......(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.13/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 692(E), dated the 28th June, 2017, namely:-
In the said notification,-
i. in the Table,-
- against serial number 1, in the entry in column (2), after item (g), the following proviso shall be inserted, namely: -
“Provided that nothing contained in this entry shall apply to services provided by a goods transport agency, by way of transport of goods in a goods carriage by road, to, -- a Department or Establishment of the Central Government or State Government or Union territory; or
- local authority; or
- 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 and not for making a taxable supply of goods or services.”;
- after serial number 11 and the entries relating thereto, the following serial numbers and entries shall be inserted, namely: -
| (1) | (2) | (3) | (4) |
| “12. | Services provided by business facilitator (BF) to a banking company | Business facilitator (BF) | A banking company, located in the taxable territory |
| 13. | Services provided by an agent of business correspondent (BC) to business correspondent (BC). | An agent of business correspondent (BC) | A business correspondent, located in the taxable territory. |
| 14. | Security services (services provided by way of supply of security personnel) provided to a registered person: 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 local authority; or 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. | Any person other than a body corporate | A registered person, located in the taxable territory.”; |
ii. in the Explanation, after clause (g), the following clause shall be inserted, namely:-
“(h) provisions of this notification, in so far as they apply to the Central Government and State Governments, shall also apply to the Parliament and State Legislatures.”.
2. This notification shall come into force on the 1st day of January, 2019.
(Gunjan Kumar Verma)
Under Secretary to the
Government of India
Note: -The principal notification No. 13/2017 - Central Tax (Rate), dated the 28th June, 2017was published in the Gazette of India, Extraordinary, vide number G.S.R. 692 (E), dated the 28th June, 2017 and was last amended by notification No. 15/2018 - Central Tax (Rate), dated the 26th July, 2018 vide number G.S.R. 679(E), dated the 26th July, 2018.
📚 Frequently Asked Questions (FAQs): Notification No. 29/2018 – Central Tax (Rate)
Q1: What is Notification No. 29/2018 – Central Tax (Rate)?
Answer:
It is a GST notification issued on 31 December 2018 to add certain services under the Reverse Charge Mechanism by amending Notification 13/2017.
Q2: When did this notification come into effect?
Answer:
It became effective from 1 January 2019. 29
Q3: Under which section was this notification issued?
Answer:
It was issued under Section 9(3) of the CGST Act, 2017, which empowers the government to specify RCM services.
Q4: Which services were newly added under RCM?
Answer:
Three main services were added:
Business facilitator to bank
BC agent to business correspondent
Security services to registered persons
Q5: What is Reverse Charge Mechanism (RCM)?
Answer:
Under RCM, the recipient of the service pays GST instead of the supplier.
Q6: Are all security services covered under RCM?
Answer:
No. RCM applies only when:
Security services are provided by non-body corporate
To a registered person
Q7: Does RCM apply if the service recipient is under composition scheme?
Answer:
No.
If the recipient is paying tax under Section 10 (Composition Scheme), RCM does not apply. 29
You can check eligibility with
👉 Finodha GST Compliance: https://finodha.in/gst-compliance/
Q8: Who pays GST when a BF provides services to a bank?
Answer:
The bank pays GST under RCM.
Q9: Who pays GST when a BC agent provides services to BC?
Answer:
The business correspondent pays GST under RCM.
Q10: Are government departments always under RCM for security services?
Answer:
No.
If they are registered only for TDS under Section 51, RCM does not apply. 29
Q11: Can the recipient claim ITC on RCM tax paid?
Answer:
Yes, if:
The recipient is registered
The service is used for business purposes
ITC conditions under Section 16 of CGST Act are satisfied
Q12: How should RCM be reported in GST returns?
Answer:
RCM liability must be reported in:
GSTR-3B under RCM section
ITC claimed in the same return if eligible
Start filing easily with
👉 Finodha GST Return Filing: https://finodha.in/gst-return-filing/
Q13: Does this notification affect small businesses?
Answer:
Yes.
Small businesses receiving security or financial intermediary services may have to pay GST under RCM.
Q14: What happens if RCM is not paid?
Answer:
The taxpayer may face:
Interest
Penalties
GST demand notices
Avoid such issues with
👉 Finodha GST Compliance: https://finodha.in/gst-compliance/
Q15: Is this notification still applicable today?
Answer:
Yes.
The provisions continue to apply unless amended or superseded by later GST notifications.
Conclusion
Notification No. 29/2018 – Central Tax (Rate) significantly expanded the scope of the Reverse Charge Mechanism by adding key service categories like security services and financial intermediary services.
Download PDF: Notification No. 29/2018 – Central Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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