Reverse Charge Provision in GST

Reverse Charge Provision in GST

Reverse Charges on GST means, the liability to pay the tax by person receiving goods and services instead of the person supplying the goods and services.

Definitions (Reverse Charge in GST )

Section 2 Sub Section (98) of CGST Act-2017– “reverse charge” means the liability to pay
tax by the recipient of supply of goods or services or both instead of the supplier of
such goods or services or both under sub-section (3) or sub-section (4) of section 9, or
under sub-section (3) or subsection(4) of section 5 of the Integrated Goods and Services
Tax Act;

Services under reverse charge as Approved By GST Council

Section 9 of sub-section (3) CGST 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 goods or services or both.

List of Services under reverse charge as Approved By GST Council

[gview file=”https://legaltaxguru.com/wp-content/uploads/2017/07/list-of-services-under-reverse-charge-2.pdf”]

Section 9 of sub-section (4) CGST Act-2017-   The Central 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.

Exemption from reverse charge up to 5000/- per day under section 11 (1) ( goods or services or both received by a registered person from any supplier, who is not registered,)

Please Read notification dated- 28.06.2017

[gview file=”https://legaltaxguru.com/wp-content/uploads/2017/07/Exemption-from-reverse-charge-Rs5000-per-day.pdf”]

Sub-section (3) of section 5 of the Integrated Goods and Services Tax Act; (IGST)

(3) 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 goods or services or both.

Sub-section (3) of section 5 of the Integrated Goods and Services Tax Act;

(4) 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.

List of exempted services (reverse charge in gst)

Services provided by:-

(a) an arbitral tribunal to –

(i) any person other than a business entity; or

(ii) A business entity with a turnover up to rupees twenty lakh (10 lakh rupees in a special category state) in the preceding F.y;

(b) A partnership firm of advocates or an individual as an advocate other than a senior advocates, by way of legal services to-

(i) an advocate or partnership firm of advocates providing legal services;

(ii) any person other than a business entity; or

(iii) a business entity with a turnover up to (20 lakh rupees) rupees twenty lakh (10 lakh rupees in a special category state) in the preceding financial year; or

(c) a senior advocate by way of legal services to-

(i) any person other than a business entity; or

(ii) a business entity up to rupees 20 lakh (10 lakh rupees in a special category state) in the preceding F.Y;

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