Reverse Charge Mechanism


1.Section 2(38)- 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.

2. Specified Goods under Reverse Charge- Notification No.4/2017-Central Tax

Sr. No Description of supply of goods Supplier of Goods Recipient of Goods
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
4A Raw Cotton Agriculturist Any registered person
5 Supply of lottery State Government, Union Territory or any local authority Lottery distributor or selling agent
6 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

3. Specified Services under Reverse Charge- Notification No. 13/2017- Central Tax

Sr. No Description of supply of goods Supplier of Goods Recipient of Goods
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 Goods Transport Agency (GTA)
  • (A) Any factory registered under or governed by the factories act, 1948
  • (B) Any Society registered under the Socities Registration Act, 1860.
  • (C) Any Co-operative society established by or under any laws.
  • (D) Any person registeredunder Cnetral Goods and services Tax Act.
  • (E) Any Body- Corporate established by or under any law.
  • (F) Any partnership firm whether registered or not under and law.
  • (G) Any casual taxable person located in the taxable territory
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 An Arbitral Tribunal Any Business Entity located in the taxable territory
4 Services provided by way of sponsorship Any Person Any body corporate or partnership firm located in the taxable territory
4A Raw Cotton Agriculturist Any registered person
5 Services supplied by the Central Government, State Government, union territory or local authority to a business entity excluding-
  • (i)Renting of immovable property, and
  • (ii)Services by the department of Posts by way of speed post, express parcel post, life insurance, and agency services
  • (iii)Services in relation to an aircraft or a Vessel, inside or outside the precincts of a port or an airport.
  • (iv)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 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 or a body corporate to the said company or the body corporate Director The company or 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 co or a financial institution or a non-banking finance company A Recovery Agent a banking co or a financial institution or a non-banking finance company
9 Services supplied by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright Author, music composer, photographer, artist Publisher, music company, producer or the like, located in the taxable territory
10 Services supplied by the members of overseeing committee to Reserve Bank of India members of overseeing committee Reserve Bank of India