Reverse Charge (RCM) under GST updated till 14th May 2019

“Reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both.

 

GST shall be paid by the recipient of goods or services or both, on reverse charge basis, in the following cases:

Sl Category of supply of services Supplier of Service Recipient of service
1 Supply of services by a Goods Transport Agency (GTA) [who has not paid central tax at the rate of 6%], in respect of transportation of goods by road.  Goods Transport Agency (GTA)  (a) any factory registered under or governed by the Factories Act, 1948;or
(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;
or
(c) any co-operative society established by or under any law;
or
(d) any person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST 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
2 Services provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectly An individual Advocate including a senior advocate or firm of advocates Any business entity located in the taxable territory.
3 Services supplied by an arbitral tribunal to a business entity. An arbitral tribunal Any business entity located in the taxable territory
4 Services provided by way of sponsorship to any Body corporate or partnership firm. Any person Any Body corporate or partnership firm
5 Services supplied by the Central Government, State, Government, Union territory or local authority to a business entity excluding, –(1) renting of immovable property, and
(2) 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
5A 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 (12 of 2017) Central Government, State Government, Union territory or local authority Any person registered under the Central Goods and Services Tax Act, 2017
6 Services supplied by a director of a company/body corporate to the said company/body corporate. A director of a company or a body corporate The company or a body corporate located in the taxable territory.
7 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.
8 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.
9 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 coveredunder section 13(1)(a) of the Copyright Act,1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like. Author or music composer, photographer, artist, or the like Publisher, music company, producer or the like, located in the taxable territory.
10 Supply of service by the members of overseeing committee to Reserve Bank of India Members of The Overseeing Committee constituted by the Reserve Bank of India Reserve Bank of India
11 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).(Notification No. 16/2018-Integrated Tax (Rate), Dated: 26th July, 2018) 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
12 Services provided by business facilitator (BF) to a banking company(clarification  vide circular No. 85/05/2019 – GST dt 01 Jan 2019)  Business facilitator (BF)  A banking company,
located in the taxable territory
13 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 Govt. 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 only for the purpose of deducting tax under section 51 of the 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.
Notification No. 29/2018 – Central tax dated 31.12.2018
Any person other than a body corporate A registered person,
located in the taxable territory

In addition to above services, following two additional services has been notified by the Central Government vide Notification No.10/2017-Integrated Tax(Rate) Dated 28-06-2017 wherein whole of the tax shall be payable by the recipient on services U/s 5(3) of IGST Act,2017 on Reverse charge basis.

Sl No. Category of supply of services Supplier of Service Recipient of service
01 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 non-taxable online recipient.
02 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 a non-taxable territory. Importer, as defined in Sec 2(26) of the Customs Act,1962, located in the taxable territory.

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