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. NoDescription of supply of goodsSupplier of GoodsRecipient of Goods
1Cashew nuts, not shelled or peeledAgriculturistAny registered person
2Bidi wrapper leaves (Tendu)AgriculturistAny registered person
3Tobacco leavesAgriculturistAny registered person
4Silk YarnAny person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn.Any registered person
4ARaw CottonAgriculturistAny registered person
5Supply of lotteryState Government, Union Territory or any local authorityLottery distributor or selling agent
6Used Vehicles, seized and confiscated goods, old and used goods, waste and scrapCentral government, State government, Union territory or a local authorityAny registered person

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

Sr. NoDescription of supply of goodsSupplier of GoodsRecipient of Goods
1Supply of Services by a Goods Transport Agency (GTA) [Who has not paid central tax at the rate of 6%] in respect of transportationGoods 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
2Services provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectlyAn individual advocate including a senior advocate or firm of advocatesAny Business Entity located in the taxable territory
3Services supplied by an Arbitral TribunalAn Arbitral TribunalAny Business Entity located in the taxable territory
4Services provided by way of sponsorshipAny PersonAny body corporate or partnership firm located in the taxable territory
4ARaw CottonAgriculturistAny registered person
5Services 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 passengersCentral Government, State Government, union territory or local authorityAny Business Entity located in the taxable territory
5AServices 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, 2017Central Government, State Government, union territory or local authorityAny person registered under the central Goods and services Tax Act, 2017
6Services supplied by a Director of a company or a body corporate to the said company or the body corporateDirectorThe company or body corporate located in the taxable territory
7Services supplied by an Insurance Agent to any person carrying on insurance businessAn Insurance AgentAny person carrying on insurance business, located in the taxable territory
8Services supplied by a Recovery Agent to a banking co or a financial institution or a non-banking finance companyA Recovery Agenta banking co or a financial institution or a non-banking finance company
9Services supplied by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyrightAuthor, music composer, photographer, artistPublisher, music company, producer or the like, located in the taxable territory
10Services supplied by the members of overseeing committee to Reserve Bank of Indiamembers of overseeing committeeReserve Bank of India