In case of certain notified supplies, the receiver of goods or services is liable to pay GST under reverse charge mechanism (RCM). Read more on reverse charge mechanism, its applicability, goods & services notified under such, its impact on eCommerce Operators, and related frequently asked questions
Generally, the supplier of goods or services is liable to pay GST. However, in case of certain notified supplies, the receiver of goods or services is liable to pay GST under reverse charge mechanism. Reverse charge means the liability to pay tax is on the recipient of goods or services instead of supplier of such goods or services.
Reverse Charge will be applicable in case of following situations
1) Supplies received by registered persons from unregistered suppliers
2) Supply of certain goods or services notified by CBEC
The Central government upon the recommendations of the council has deferred the reverse charge mechanism till 30th Sep 2019
Goods like Cashew nuts (not shelled / peeled), bidi wrapper leaves, tobacco leaves, supply of lottery, silk / yarn etc. are taxable under reverse charge mechanism i.e., recipient is liable to pay tax.
The following categories of services are notified under reverse charge mechanism. The recipient of services is liable to pay GST in case of following services.
The government has notified the specific categories of services where the tax on intra state supplies shall be paid by the E Commerce operator if such services are supplies through it.
Yes, as long as the tax is on the subject of levy, the Government is free to collect this tax from any person either the supplier or the recipient or anyone else. Even a third party can be called upon to deposit the tax provided there is some nexus such as collection of payment for the supply between two other persons.
The recipient who pays tax on reverse charge basis can take the input tax credit of the tax paid under reverse charge. For supplier whose tax is paid by the recipient, value of such supply will be treated as ‘exempt supply’.
No, even if supplier has somehow paid tax, reverse charge liability must be discharged by the recipient.
No, GST wrongly paid by supplier cannot be claimed as input tax credit (ITC) by recipient in case of supply reported in FORM GSTR-1 as "Supplies attracting tax on reverse charge basis". However, the supplier can claim for refund of tax wrongly paid.
No, second proviso to Section 16(2) of the CGST Act requiring the recipient to make payment towards the value of supply along with tax payable thereon within a period of 180 days does not apply to supplies on which tax is payable on reverse charge basis.
In case of natural disaster or loss, no import duty is levied, therefore no GST will be applicable.
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