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TMI BlogReverse Charge Mechanism in GSTX X X X Extracts X X X X X X X X Extracts X X X X ..... f the CGST/SGST (UTGST) Act and section 5 (3) of the IGST Act. Second scenario is covered by section 9 (4) of the CGST/SGST (UTGST) Act and section 5 (4) of the IGST Act where taxable supplies by any unregistered person to a registered person is covered. As per the provisions of section 9(3) of CGST / SGST (UTGST) Act, 2017 / section 5(3)of IGST Act, 2017, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017. Thus, Government entities who are TDS Deductors under Section 51 of CGST Act, 2015, need not pay GST under reverse charge in case of procurements from unregistered suppliers. Registration: A person who is required to pay tax under reverse charge has to compulsorily register under GST and the threshold limit of ₹ 20 lakh (Rs. 10 lakh for special category states except J K) is not applicable to them. ITC: A supplier cannot take ITC of GST paid on goods or services used to make supplies on which recipient is liable to pay tax. Time of Supply The Time of supply is the point when the supply is liable to GST. One of the factor relevant for determining time of supply is the person who is liable to pay tax. In reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Any amount payable under reverse charge shall be paid by debiting the electronic cash ledger. In other words, reverse charge liability cannot be discharged by using input tax credit. However, after discharging reverse charge liability, credit of the same can be taken by the recipient, if he is otherwise eligible. 4. 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. 5. Advance paid for reverse charge supplies is also leviable to GST. The person making advance payment has to pay tax on reverse charge basis. Supplies of goods under reverse charge mechanism: S/ No. Description of supply of Goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient. Any person located in a non-taxable territory Any person located in the taxable territory other than non-taxable online recipient. 2 GTA Services Goods Transport Agency (GTA) who has not paid integrated tax at the rate of 12% Any factory, society, co-operative society, registered person, body corporate, partnership firm, casual taxable person; located in the taxable territory 3 Legal Services by advocate An individual advocate including a senior advocate or firm of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a company or a body corporate The company or a body corporate located in the taxable territory 8 Services supplied by an insurance agent to any person carrying on insurance business An insurance agent Any person carrying on insurance business, located in the taxable territory 9 Services supplied by a recovery agent to a banking company or a financial institution or a non-banking financial company A recovery agent A banking company or a financial institution or a non-banking financial company, located in the taxable territory 10 Services supplied by a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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