REVERSE CHARGE MECHANISM UNDER GST

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(Last Updated On: June 15, 2018)

What is Reverse charge mechanism under GST?

Generally tax is paid by the supplier. But in some cases tax is paid by the recipient, this is called reverse charge mechanism. Under earlier indirect laws, reverse charge was only for services and service tax was used to be paid by the recipient of services. But now in GST law, in some cases, tax will be payable on both goods and services under reverse charge mechanism by the recipient of goods and services.

Cbec.gov.in notification no. 13/2017-Central Tax (Rate) dated. 28th June, 2017, notifies that on certain categories of supply of services Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of such services.

Cbec.gov.in notification no. 8/2017-Central Tax (Rate) dated. 28th June, 2017 exempts supplies of goods or service or both received by a registered person from any or all the unregistered suppliers below Rs. 5,000 in a day.

Cbec.gov.in notification no. 5/2017-Central Tax dated. 19th June, 2017 specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration. This notification shall come into force on the 22nd day of June, 2017.

Cbec.gov.in notification no. 4/2017-Central Tax (Rate) dated. 28th June, 2017, notifies that in case of the following categories of goods, the tax on intra-State supplies shall be paid by the recipient of goods:-

  1. Cashew nuts, not shelled or peeled by Agriculturist
  2. Bidi wrapper leaves (tendu) by Agriculturist
  3. Tobacco leaves by Agriculturist
  4. Silk yarn
  5. Supply of lottery by State Government, Union Territory or any local authority

Cbec.gov.in notification no. 10/2017-Integrated Tax dated. 28th June, 2017

notifies that on certain categories of supply of services the whole of integrated tax leviable under section 5 of the said Integrated Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services.

Cbec.gov.in notification no. 4/2017- Integrated Tax (Rate) dated. 28th June, 2017, notifies that in case of the following categories of goods, the tax on intra-State supplies shall be paid by the recipient of goods:-

  1. Cashew nuts, not shelled or peeled by Agriculturist
  2. Bidi wrapper leaves (tendu) by Agriculturist
  3. Tobacco leaves by Agriculturist
  4. Silk yarn
  5. Supply of lottery by State Government, Union Territory or any local authority

Download notification no. 4/2017- Integrated Tax (Rate) : Click Here

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