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  • Reverse charge means the liability to pay tax is on the recipient of supply of G/S instead of the supplier.
  • Generally, supplier is liable to pay GST. However, under RCM, liability to pay GST is on recipient of G/S.
  • However, underlying principle of an indirect tax is that burden of such tax has to be ultimately passed on to the recipient. GST being an indirect tax, this principle holds good for GST. Therefore, under RCM, only the compliance requirements, [i.e. to obtain registration under GST, deposit the tax with the Government, filing returns, etc.] have been shifted from supplier to recipient
There are two type of reverse charge scenarios provided in law.
Sec. 9(3) Supply of specified categories of goods or services is covered by section 9(3) of CGST Act.
Sec. 9(4) Supply of specified categories of G/S made by an unregistered supplier to specified class of registered recipients is covered by section 9(4) of CGST Act.
A. GOODS NOTIFIED UNDER RCM [Sec 9(3) of CGST Act & 5(3) of IGST Act]

  • Cashewnuts [not shelled/peeled];
  • Bidi wrapper leaves & tobacco leaves;
  • Supply of Lottery; Silk yarn, used vehicles,
  •  Seized & confiscated goods;                                                     Tax is payable by the Recipient of Goods
  • Old & used goods,
  • Waste & scrap,
  • Raw cotton, etc
Nature of Service Supplier (BY) Recipient [Person liable to pay GST
Goods Transport Agency (GTA) by Road

§  who has not paid CGST @ 6% 

§   who has not availed ITC

Goods              Transport

Agency paying 2.5%


(a) Factory (Factories Act, 1948);

(b) Society (Societies Registration Act)

(c) Co-operative society

(d) Any body corporate

(e) P’ship Firm (including AOP/BOI)

(f) Casual Taxable Person in TT.

(g) Registered Person under GST

AMD: NO RCM on Transportation services provided by GTA to Department/establishment of

CG/SG/UT; LA; Governmental agencies which has taken registration under GST only for the

purpose of deducting tax u/s 51 & not for making a taxable supply of goods or services.

Note: Above services have been simultaneously exempted from payment of tax.

Meaning of Recipient: Person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in TT shall be treated as the person who receives the service for the purpose of this notification.

Q. ABC Ltd. availed service of XYZ Ltd. (GTA) for transportation ofgoods by road from Pune to Mumbai.

Ans: GST shall be paid by ABC Ltd. under RCM u/s 9(3) since it is liable to pay freight for transportation of goods. Thus ABC Ltd. shall be treated as recipient of service. If GTA has paid GST under forward charge @ 12% then it is not subject to reverse charge

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