Beruflich Dokumente
Kultur Dokumente
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 under Section 9(3) and 9(4) of
GST Act or under section 5(3) or 5(4) of the IGST Act .
Under the Service Tax Law, tax on Reverse Charge basis is leviable under various services but
the concept of Reverse Charge on goods is totally a new concept under the GST regime.
Sections 9(3) & 9(4) of the GST Act, 2017 deals with the provisions of Reverse Charge
Central tax in respect of the supply of taxable goods or services or both by a supplier, who is not
registered, to a registered person shall be paid by such person on reverse charge basis as the
recipient 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.
In line with the provision of Section 9(3) and 9(4) in GST Act, Similar provision has been
incorporated in Section 5(3) and 5(4) of the IGST Act,to levy tax on goods and services under
the reverse charge basis on their Inter- state supply of goods or services or both . However
Section 24 of the GST Act, provides for mandatory registration in case of interstate supplies. So
if an unregistered dealer cannot make interstate supplies then whether a registered person can
purchase goods/ services in the course of interstate trade or commerce from unregistered dealer?
This is to be seen
GST Counsel in its meeting held on 19-05-2017 has approved certain services the tax on which
tax shall be paid on reverse charge basis which are mostly the same items as are prevailing in the
service tax regime. However the Government is still to come out with list of goods on which tax
shall be paid on reverse charge basis.
7. Additional Responsibility of Registered person for purchase of goods or services
from unregistered person
Now a registered person purchasing goods/ services from unregistered person has to pay tax on
those goods/ services on his behalf on reverse charge basis and all the provisions of the Act will
apply to him as he is the person supplying such goods or Services. Now this will lead to an extra
blockage of capital and some extra compliance under the Act in this regards. So a registered
person who procures any goods/ services from an unregistered dealer will have to pay tax on
their receipt and then will have to claim ITC on the same subject to the conditions of the Act.
Not only this ,a registered person receiving supply under reverse charge has to issue an invoice
and payment voucher as per the requirement of section 31(3)(f) and section 31(3)(g) of GST Act
which is reproduced as under .
A registered person who is liable to pay tax under section 9(3) or 9(4) shall issue an invoice in
respect of goods or services or both received by him from the supplier who is not registered on
the date of receipt of goods or services or both. ( Sample Format of Invoice is given below)
[Section 31(3)(g)] A registered person who is liable to pay tax under section 9(3) or 9(4)
shallissue a payment voucher at the time of making payment to the supplier.( Sample Format of
Payment voucher is given below)