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Reverse Charge in GST
by CA Maninder Singh
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What is Reverse Charge?
Normally Seller pays GST by charging from buyer
But in some cases, Buyer pays GST directly to Government
This is called Reverse Charge
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When is Reverse Charge Applicable?
It is applicable as per Section 9(3) and Section 9(4)
1. Section 9(4) - Purchases from Unregistered Dealer were covered here Local Purchases
upto 5000 per day were exempt.
2. Section 9(3) - Certain Goods and Services notified by Government were covered like
Goods Transport Agency, Freight etc.
As per decision in GST Council Meeting Section 9(4) has been stopped by Government
However, Section 9(3) is still applicable. Hence GST is still applicable on following services
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Reverse Charge Chart
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213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
Reverse Charge on Goods
Whether we get input of Reverse Charge?
On Certain Items, No Input will be available like Food, Catering, etc
Also if Goods Transport Agency Charges 5% no Input will be available.
On Other Items, Input Available Next Month
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CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
teachoo.com
CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
What will be entry of Reverse Charge?
It depends upon whether we get Input of
Suppose GST Rate is 5% (2.5% CGST, 2.5% SGST)
Entry
teachoo.com
CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
teachoo.com
CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
teachoo.com
CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
teachoo.com
CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
When is Output GST Payable, on Bill or Payment?
It depends upon Time of Supply of Goods and Services
Time of Supply Reverse Charge of
Goods
Time of Supply Reverse Charge of
Services We have to consider earlier of
• Date of Payment
• 30 Days of Invoice
• Date of Receipt
We have to consider earlier of
• Date of Payment
• 60 Days of Invoice
Whether Input can be used to Pay Reverse Charge Liability
No we have to deposit GST Reverse charge Liability from cash Ledger
We cannot reduce it from Input Tax Credit available to us
Example
Output GST on Sales 100
Output GST on Reverse Charge 30
Total Output 130
Input GST 110
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CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
In this case,
We have to Pay GST on Reverse Charge of 30
We can adjust input of 100 against our Output
Remaining 10 we can carry forward
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CA MANINDER SINGH PRACTICAL TRAINING CLASSES @ teachoo.com
213 APSARA ARCADE,NEXT TO KAROL BAGH METRO STATION GATE NO 7, MB - 9205065874
About the Author
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He
provides courses for Practical Accounts, Taxation, GST and E-filing
at teachoo.com.
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