CHAPTER 14

 

Reverse charge
  1. Normally, tax is payable by supplier of goods/services. However, if a vendor is not registered under GST and supplies goods to a person who is registered under GST,  the recipient is made liable to pay tax. This is termed as reverse charge.
  2. When tax is payable under reverse charge basis, the exemption available to small taxable persons (20 or 10 lakhs) is not available. However, supplies where the aggregate value of such supplies of goods or services or both received by a registered person from any or all the unregistered suppliers is less than five thousand rupees in a day, are exempted.
  3. Under reverse charge, GST has to be paid by cash i.e., through electronic cash ledger only. It cannot be paid by utilizing the input tax credit.
  4. Once tax is paid, it’s ITC is available if such goods/services are otherwise eligible for ITC.
  5. For inter-state purchases the buyer has to pay IGST. For intra-state purchases CGST and SGST has to be paid under reverse charge.
  6. Invoice level information in respect of all supplies attracting reverse charge, rate wise, are to be furnished separately in the table 4B of GSTR-1.
  7. Central Board of Excise & Customs has also specifically notified certain goods and services which fall under the reverse charge mechanisms
    For notified goods – click here

    For notified services – click here
  8. Time of supply under reverse charge is discussed here:
    Reverse charge for goods
    Reverse charge for services