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Reverse Charge Under GST

Reverse Charge has always
been a mystery box and with the
rise of GST, reverse charge will
become a major discussion point
Tally.ERP 9 … Elica Kitchen …
and will need time for all the Rs. Rs.
19,450.00 9,150.00
stakeholders to gain comfort on
it.

For those who are new to the concept of Reverse Charge a small flashback for Popular Picks
them, Reverse Charge is a important concept in service tax under which the
Reverse Charge Under GST
liability to pay service tax is shifted from service provider to service receiver,
The Biggest question - What to do of
stock on 30th June?

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Usually in Service Contracts Service tax need to be collected by service Composition Scheme under GST

provider from service receiver and have to deposit it with revenue authorities, Key provisions in GST for
Manufacturer

But under Reverse charge cases tax have to be deposited by service receiver Invoicing system under GST

directly to the revenue authorities, although service receiver depositing tax Todo list for GST to implement before
1st July
under Reverse Charge can claim Input of the tax paid by them.
Documents required for fresh
registration under GST
Another big impact of reverse charge on business entities is the form cash flow
1st Notification of GST no : 1/2017 -
management, as the tax to be paid by service receiver under Reverse Charge
Integrated Tax
cannot be deposit by using Tax credit, it need to be deposited in cash only.
10 key aspects for smooth
implementation of GST
LIST OF SERVICES UNDER REVERSE CHARGE AS APPROVED BY GST
CG issues various CGST and IGST
COUNCIL Notifications along with 5 Final Rules &
formats

1. Taxable services provided or agreed to be provided by any person who is view more »

located in a non-taxable territory and received by any person located in the

taxable territory other than non-assessee online recipient (OIDAR) CCI Articles
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2. Services provided or agreed to be provided by a goods transport agency to article@caclubindia.com

(GTA) in respect of transportation of goods by road Submit article

3. Services provided or agreed to be provided by an individual advocate or firm

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of advocates by way of legal services, directly or indirectly

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4. Services provided or agreed to be provided by an arbitral tribunal

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5. Sponsorship services
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6. Services provided or agreed to be provided by Government or local authority  Popular Articles

excluding, -

(1) renting of immovable property, and

(2) services specified below-

(i) services by the Department of Posts by way of speed post, express parcel
post, life insurance, and agency services provided to a person other than
Government;

(ii) services in relation to an aircraft or a vessel, inside or outside the precincts

of a port or an airport;

(iii) transport of goods or passengers.

7. Services provided or agreed to be provided by a director of a company or a

body corporate to the said company or the body corporate;

8. Services provided or agreed to be provided by an insurance agent to any

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person carrying on insurance business Subscribe Articles on Email

9. Services provided or agreed to be provided by a recovery agent to a banking Enter your email address

company or a financial institution or a non-banking financial company

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10. Services by way of transportation of goods by a vessel from a place outside
India up to the customs station of clearance in India

11. Transfer or permitting the use or enjoyment of a copyright covered under

clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to
original literary, dramatic, musical or artistic works

12. Radio taxi or Passenger Transport Services provided through electronic

commerce operator.

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Service Provider Service Receiver GST to be paid by

Casual Taxable
person, body
corporate, partnership
Goods Transport firm, any society,
Service recipient.
Agency factory, any person
registered under
CGST, SGST, UTGST
Act.

Banking Company,
Recovery Agent NBFC or any financial Service recipient.
institution.

A director of a
A company or a body
company or a body Service recipient.
corporate
corporate

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Reverse Charge Under GST http://www.caclubindia.com/articles/reverse-charge-under-gst-30277.asp

An individual advocate
or firm of advocates , Any business entity. Service recipient.
An arbitral tribunal

Taxi driver or Rent a

cab operator ( if
Any person E-commerce Operator
service provided by
e-commerce operator)

Any person carrying on

An insurance agent Service recipient.
insurance business

Any person providing Anybody corporate or

Service recipient.
sponsorship services partnership firm.

A person located in
non-taxable territory to
Importer Service recipient.
a person located in
non-taxable territory

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Reverse Charge Under GST http://www.caclubindia.com/articles/reverse-charge-under-gst-30277.asp

Currently under service tax there were some services on which partial reverse
charge mechanism was there , but under GST Regime, all the tax under reverse
charge have to be paid by receiver of supply of goods or services.

Although Reverse Charge is not a new phenomenon, but major reaction is

because of Section 5(4) of IGST Act'2017 as it says:

The integrated tax in respect of the supply of taxable goods or services or both
by a supplier, who is not registered, to a registered person shall be paid by such
person on reverse charge basis as the recipient and all the provisions of this Act
shall apply to such recipient as if he is the person liable for paying the tax in
relation to the supply of such goods or services or both.

Point that come clear from above section 5(4) IGST Act 2017.

GST have to paid by Registered person on receiving Taxable Supply of

goods or services from unregistered person.

Now all the business entity have to update themselves whether their suppliers
are Registered or Unregistered under GST regime because if they want to
purchase goods or services, the receiver will have to pay GST applicable on the
supply on behalf of Unregistered Supplier.

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With reverse charge falling on the buyer, unregistered business will get a tough
time as Registered buyers will be more interested in buying goods or services
from registered suppliers under GST.

Under GST Reverse Charge mechanism, E-Commerce companies called

aggregators have also been included.

Recommended Read

Shubham 27 FACEBOOK TWITTER LINKEDIN

Gupta SHARES
on 21 June
2017

Published in GST Other Articles by - Shubham Gupta

Views : 16074 Report Abuse

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Total: 20

Recent Comments

Login to post comment

amit agrawal
27 June 2017

when I claim input tax credit of RCM liability in GST ??? after payment of tax or
issuance of invoice if service receive from registered person.

amit agrawal
27 June 2017

when I claim input tax credit of RCM liability in GST ??? after payment of tax or
issuance of invoice if service receive from registered person.

amit agrawal
27 June 2017

when I claim input tax credit of RCM liability in GST ??? after payment of tax or
issuance of invoice if service receive from registered person.

 Show more View All Comments :: 20

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