Specified Reverse Charge Under GST (As Updated Till 31-Jan-2019 )-

Under Reverse charge  mechanism  recipient of the goods and/or services is liable to pay GST instead of the supplier.

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 goods or services or both.

Article discusses Specified Goods and Services on which GST is Payable under Reverse Charge Mechanism under above provisions-

1 Relevant Section related to Specified Reverse Charge under GST

(i) Section 9(3) of CGST Act

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.

(ii) Section 5(3) of IGST Act

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

(iii) Section 9(3) of Maharashtra State GST Act

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.

2. Goods notified by Government on which GST shall be paid on Reverse Charge Basis

Sr Description of Goods Supplier of Goods Recipient of Goods Notification No. Effective From
i Cashew nuts, not shelled or peeled Agriculturist Any registered person Notification No. 4/2017-Central Tax (Rate) 01-Jul-17
ii Bidi wrapper leaves
(tendu)
Agriculturist Any registered person
iii Tobacco Leaves Agriculturist Any registered person
iv Silk yarn Agriculturist Any person who manufactures silk yarn from raw silk / silk worm cocoons for supply of silk yarn
v Supply of lottery State Government,
Union Territory or
any local authority
Lottery distributor or selling agent
vi Used vehicles, seized and confiscated goods, old and used goods, waste and scrap Central Government,
State Government, Union territory or a local authority
Any registered person Notification No. 36/2017-Central Tax (Rate) 13-Oct-17
vii Raw cotton Agriculturist Any registered person Notification No. 43/2017-Central Tax (Rate) 15-Nov-17
viii Priority Sector Lending
Certificate
Any registered person Any registered person Notification No.11/2018-Central Tax (Rate) 28-May-18

3. Services notified by Government on which GST shall be paid on Reverse Charge Basis

Sr Description of Supply of Services Supplier of Service Recipient of Service
A Notification No. 13/2017- Central Tax (Rate) Effective from 01-July-2017
i Supply of Services by a goods transport agency (GTA) *who has not paid central tax (CGST) at the rate of 6 in respect of transportation of goods by road to –
(a) any factory registered under or governed by the Factories Act, 1948(63 of 1948);or
(b) any society registered under the Societies
Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or
(c) any co-operative society established by or under any law; or
(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or
(e) any body corporate established, by or under any law; or
(f) any partnership firm whether registered or not under any law including association of persons & *includes Limited Liability Partnership Firm; or
(g) any casual taxable person. * Inserted by Noti. No. 22/2017
Goods
Transport
Agency (GTA)
(a) Any factory registered under or governed by
the Factories Act, 1948(63 of 1948); or
(b) any society registered under the Societies
Registration Act, 1860 (21 of 1860) or under any
other law for the time being in force in any part
of India; or
(c) any cooperative society established by or
under any law; or
(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and
Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax
Act; or
(e) any body corporate established, by or under any law; or
(f) any partnership firm whether registered or not
under any law including association of persons; or (g) any casual taxable person; located in the
taxable territory.
ii * Services provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectly.
Explanation.- “legal service” means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority * As per Corrigendum issued on 25-Sept-2017
An individual advocate
including a senior
advocate or firm of
advocates
Any business entity located in the taxable territory
iii Services supplied by an arbitral tribunal to a business entity An arbitral
tribunal
Any business entity located in the taxable territory
iv Services provided by way of sponsorship to any body corporate or partnership firm Any Person Any body corporate or partnership firm
located in the taxable territory
v Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding
services specified below –
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers
Central
Government,
State
Government,
Union
territory or
local authority
Any business entity located in the taxable territory
vi Services supplied by a director of a company or a body corporate to the said company or the body corporate A director of a company or a body corporate The company or a body corporate
located in the taxable territory
vii 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
viii 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
ix Supply of services by an author, music composer,
photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary, dramatic,musical or artistic works to a publisher, music company, producer
Author or music
composer,
photographer,
artist,
or the like
Publisher, music company, producer or the like, located in the taxable territory
B Notification No. 33/2017- Central Tax (Rate) Effective from 13-Oct-2017
i Supply of services by the members of Overseeing Committee to Reserve Bank of India Members of Overseeing Committee constituted by the Reserve Bank of
India
Reserve Bank of India
C Notification No. 3/2018- Central Tax (Rate) Effective from 25-Jan-2018
i Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a person registered under the Central Goods and Services Tax Act, 2017 Central Government,
State Government,
Union territory or
local authority
Any person registered under the Central Goods and Services Tax Act, 2017
D Notification No. 3/2018- Central Tax (Rate) Effective from 25-Jan-2018
i Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs) Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm A banking company or a non-banking financial company, located in the taxable territory
E Notification No. 29/2018- Central Tax (Rate) Effective from 01-Jan-2019
i Services provided by business facilitator (BF) to a banking company Business facilitator (BF) A banking company, located in the taxable territory
ii Services provided by an agent of business correspondent (BC) to business correspondent
(BC)
An agent of business
correspondent (BC)
A business correspondent, located in the taxable territory
iii Security services (services provided by way of supply of security personnel) provided to a registered person – Provided that nothing contained in this entry shall apply to, –
(i)(a) a Department or Establishment of the Central Government or State Government or Union territory; or
(b) local authority; or
(c) Governmental agencies; which has taken registration under the Central Goods and
Services Tax Act, 2017 for the purpose of
deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or
(ii) a registered person paying tax under section 10 of the said Act.
Any person other than a
body corporate
A registered person, located in the taxable territory
F Notification No. 10/2017- Integrated Tax (Rate) [ Additional Services notified under IGST Act ]
i Any 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 nontaxable online recipient.
ii Services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India A person located in
non-taxable territory
Importer, as defined in clause (26) of section 2 of
the Customs Act, 1962, located in the taxable
territory

4. Exemption from Registration (Notification No. 5/2017 – Central Tax)

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 under the aforesaid Act

5. Goods Transport Agency Exemption of Intra-state Supply Notification No. 12/2017- Central Tax (Rate)

Services provided by a goods transport agency, by way of transport in a goods carriage of goods – 1) Where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees ( or ) 2) Where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty Reverse Charge will aslo not be applicable in above case.

Author by : By CA. Pavan Auti, Partner, A A M D & Associates, Chartered Accountants, Email – pavan.aamd@gmail.com

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4 Comments

  1. pankaj kumar gupta says:

    Point No. D in the list of specified services, the notification no. 15/2018 dated 26.07.2018 with effective from 27.07.2018.

  2. karan shah says:

    xyz a LLC an shipping agency receives Rs. 2,00,000 towards freight for transporting goods in aircraft from France to airport located in from Mr. Y. Is ths transaction exempted from reverse charge mechanism?

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