Reverse charge as defined under sub-section (98) of section 2 of the CGST Act, 2017 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 sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act. Under reverse charge mechanism, the recipient of supply of goods or services is liable to pay and remit the GST to the Government instead of supplier of such goods or services.
The services on which reverse charge is applicable under section 9(3) of the CGST Act, 2017 and section 5(3) of the IGST Act, 2017 have been listed below-
| Sl. No. | Category of Supply of Services | Supplier of Service | Recipient of Service |
| 1 | Supply of Services by a goods transport agency (GTA), in respect of transportation of goods by road. Exception– A. Supply of services provided by a goods transport agency, by way of transport of goods in a goods carriage by road, to,— (a) a Department or Establishment of the Central Government or State Government or Union territory; or (b) local authority; or (c) Governmental agencies, which has taken GST registration only for the purpose of deducting tax and not for making a taxable supply of goods or services. B. Where- i) the GTA has taken GST registration and exercised the option to pay tax on the services of GTA in relation to transport of goods supplied by him under forward charge; and ii) the GTA has issued a tax invoice to the recipient charging GST at the applicable rates and has made a declaration in prescribed manner on such invoice issued by him. | Goods Transport Agency (GTA) | (a) Any factory registered under or governed by the Factories Act, 1948; or (b) Any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India; or (c) any co-operative society established by or under any law; or (d) Any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or (e) Any body corporate established, by or under any law; or (f) Any partnership firm whether registered or not under any law including association of persons; or (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 to a business entity. | An arbitral tribunal. | Any business entity located in the taxable territory. |
| 4 | Services provided by way of sponsorship to any body corporate or partnership firm. | Any person | Any body corporate or partnership firm located in the taxable territory. |
| 5 | Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding,— 1) renting of immovable property, and 2) services specified below— i) services by the Department of Posts by way of Central Government, State Government, Union territory or local authority ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; iii) transport of goods or passengers. | Central Government, State Government, Union territory or local authority | Any business entity located in the taxable territory. |
| 6 | Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person. | Central Government, State Government, Union territory or local authority | Any registered person. |
| 7 | Services supplied by any person by way of transfer of development rights or Floor Space Index (FSI) (including additional FSI) for construction of a project by a promoter. | Any person | Promoter |
| 8 | Long term lease of land (30 years or more) by any person against consideration in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name) and/or periodic rent for construction of a project by a promoter. | Any person | Promoter |
| 9 | Services supplied by a director of a company or a body corporate to the said company or the body corporate. | A director of a company or a body corporate | The company or a body corporate located in the taxable territory. |
| 10 | 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. |
| 11 | Services supplied by a recovery agent to a banking company or a financial institution or a non-banking financial company. | A recovery agent | A banking company or a financial institution or a nonbanking financial company, located in the taxable territory. |
| 12 | Supply of services by a music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original dramatic, musical or artistic works to a music company, producer or the like. | Music composer, photographer, artist, or the like | Music company, producer or the like, located in the taxable territory. |
| 13 | Supply of services by an author by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary works to a publisher. | Author | Publisher located in the taxable territory: Exception: where,— i) the author has taken GST registration and filed a declaration, in prescribed form, within prescribed time limit, with the jurisdictional Commissioner, that he exercises the option to pay GST under forward charge and to comply with all the provisions of the Act as they apply to a person liable for paying the tax in relation to the supply of any goods or services or both and that he shall not withdraw the said option within a period of 1 year from the date of exercising such option; ii) the author makes the prescribed declaration, on the invoice issued by him in Form GST Inv-I to the publisher. |
| 14 | Supply of services by the members of Overseeing Committee to Reserve Bank of India | Members of Over-seeing Committee constituted by the Reserve Bank of India | Reserve Bank of India. |
| 15 | Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs). | Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm. | A banking company or a non-banking financial company, located in the taxable territory. |
| 16 | Services provided by business facilitator (BF) to a banking company | Business facilitator (BF) | A banking company, located in the taxable territory. |
| 17 | Services provided by an agent of business correspondent (BC) to business correspondent (BC) | An agent of business correspondent (BC) | A business correspondent, located in the taxable territory. |
| 18 | Security services (services provided by way of supply of security personnel) provided to a registered person: Exception: (i) (a) a Department or Establishment of the Central Government or State Government or Union territory; or (b) local authority; or (c) Governmental agencies; which has taken registration only for the purpose of deducting tax and not for making a taxable supply of goods or services; or (ii) Composition dealer | Any person other than a Body corporate | A registered person, located in the taxable territory. |
| 19 | Services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient, provided to a body corporate. | Any person, other than a body corporate who supplies the service to a body corporate and does not issue an invoice charging tax at the rate of 12 per cent to the service recipient | Any body corporate located in the taxable territory. |
| 20 | Services of lending of securities under Securities Lending Scheme, 1997 (“Scheme”) of Securities and Exchange Board of India (“SEBI”), as amended. | Lender i.e. a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the Scheme of SEBI | Borrower i.e. a person who borrows the securities under the Scheme through an approved intermediary of SEBI. |
| 21 | Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient. | Any person located in a non-taxable territory | Any person located in the taxable territory other than non-taxable online recipient. |
| 22 | Services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. | A person located in non‐taxable territory | Importer, as defined in clause (26) of section 2 of the Customs Act, 1962, located in the taxable territory. |
| 23 | Services by way of renting of residential dwelling to a registered person. | Any Person | Any registered person. |
Related Notifications
- Notification No. 13/2017 Central Tax (Rate) dated 28.06.2017
- Notification No. 10/2017 Integrated Tax (Rate) dated 28.06.2017