We have compiled two notifications, in relation to Reverse Charge mechanism in the GST Acts, issued by the Central Government on the recommendation of the GST Council. One is notifying certain goods on supply of which tax shall be borne by the recipient of such goods and the other is notifying certain services on supply of which tax shall be borne by the recipient of such services.
Notified Goods and Service
(i) Notified goods
The Central Government on the recommendation of the GST Council notified certain goods vide notification number 04/2017-Central Tax (Rate), dated 28.06.2017 tax liability on supply of which shall be paid by the recipient (i.e. reverse charge) of such goods in case of INTRA STATE SUPPLY. The notification has been effective from 01.07.2017.
|Sl. No.||Description of supply of goods||Supplier of goods||Recipient of supply|
|1||Cashew nuts, not shelled or peeled||Agriculturist||Any registered person|
|2||Bidi wrapper leaves (tendu)||Agriculturist||Any registered person|
|3||Tobacco leaves||Agriculturist||Any registered person|
|4||Silk yarn||Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn||Any registered person|
|5||Supply of lottery||State Government, Union Territory or any local authority||Lottery distributor or selling agent|
Note : (1) In case of supply under serial number 1, 2 and 3 of the above table, where supplier of goods are other than agriculturists, reverse mechanism shall not apply.
(2) In case of inter-state supply of goods in the above table, reverse mechanism shall not apply.
(ii) Notified Services
The Central Government on the recommendation of the GST council has notified (vide notification number 13/2017 – Central Tax (Rate), dated 28-06-2017) following nine categories of services tax on supply of which shall be paid on “Reverse Charge” basis.
|Sl No.||Supplier of Service||Recipient of Service|
|1||Goods Transport Agency (GTA) : In respect of transportation of goods by road||(a) Any factory registered or governed under the Factories Act, 1948
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(b) Any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India.
(c) Any co-operative society established by or under any law.
(d) Any person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST Act.
(e) Any body corporate established by or under any law.
(f) Any partnership firm including association of persons.
(g) Any casual taxable person.
|2||An individual advocate including a senior advocate or firm of advocates||Any business entity.|
|3||An arbitral tribunal||Any business entity.|
|4||Service provided by any person by way of sponsorship.||Any body corporate or partnership firm|
|5||Service supplied by the Central Government, State Government, Union territory or Local authority except following services:
(a) Renting of immovable property
(b) Services by the department of posts by way of speed posts, express post, life insurance, and agency services provided to a person other than Central Government, State Government or Union Territory or Local Authority.
(c) Services in relation to an aircraft or a vessel inside or outside the precincts of port or an airport.
(d) Transport of goods or passengers
|Any business entity|
|6||A Director of a company||The company or body corporate|
|7||An Insurance agent||Any person carrying on insurance business|
|8||A recovery agent||A banking company or a financial institution or a non- banking financial company.|
|9||Author, music composer, photographer, artist or the like.||Publisher, music company, producer or the like|
(1) All the category of recipients of service mentioned in the table above shall be located in the taxable territory.
(2) Against serial number 1 in the above Table, the person who makes payment of freight charges shall be considered as recipient of service.
(3) Body corporate has the same meaning as defined in clause (11) of section 2 of the Companies Act, 2013. A Private limited company, a Public limited company and a Limited Liability Partnership Firm (LLP) are a few examples of Body Corporate.