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01. Basics Example: Tax in respect of services of Example: M/s Usha Ltd. trading co. is an
CCP 03.01.01.00 advocate availed by a business entity unregistered supplier who sold cement to

What does the payment of tax under reverse charge mean? is payable on reverse charge basis. M/s XYZ pvt ltd being a registered person
CH 3 Answer - As per section 2(98) of CGST Act, 2017, “reverse charge” means the Here the liability to pay GST shall be and promoter.
Here the liability to pay GST shall be
upon the Business entity.
liability to pay tax by the recipient of supply of goods or services or both instead of
Reverse Charge & ECO or under sec 5(3) or sec 5(4) of the Integrated Goods and Services Tax Act. Whether Reverse Charge is applicable in case supply is exempted or non-
upon XYZ pvt ltd.
the supplier of such goods or services or both under sec 9(3) or sec 9(4) of CGST Act
CCP 03.01.04.00
CCP 03.01.02.00

What are the different types of supplies which are liable to tax under reverse
taxable?
charge mechanism?
Answer - As per Section 9 of the CGST Act, 2017
there are two types of supplies
thereon and if there is no tax, there cannot be any tax under reverse charge. Reverse
which are liable to tax under reverse charge mechanism which are:- Answer:- No, If supply itself is exempt or non-taxable there cannot be any tax
charge calculates tax that would have been payable by the supplier, if there was no
1. Speciﬁed categories of supply of goods or services or both as notiﬁed by government reverse charge.
on recommendation of the council as per sec 9(3).

2. Supply of a speciﬁed category of goods or services or both by a supplier, who CCP 03.01.05.00
is not registered, to a speciﬁed class of registered person as per sec 9(4) . What is the effect of reverse charge on input tax credit?
Answer:- As regards the recipient who pays tax on reverse charge basis, tax so paid
would be available as credit subject to section 16 & 17.
CCP 03.01.03.00 As regards the supplier whose tax is paid by the recipient, value of such supply will be
What is the difference between reverse charge u/s 9(3) and u/s 9(4)?
treated as 'exempt supply' of the Supplier & Supplier is not eligible for ITC u/s 17.
Answer For example: An Advocate has provided legal services to M/s Shreya pvt ltd worth `

Section 9(3) Section 9(4) 1,00,000 & GST @ 18% i.e ` 18,000 is levied on this service. The liability to discharge
Applicable in case of supply of goods Applicable in case of supply of speciﬁed the GST of ` 18,000 shall be upon M/s Shreya pvt ltd & the credit of tax so paid would
or services or both, notiﬁed by the category goods or services or both by an be available as credit to M/s Shreya pvt ltd being the recipient.
Government on recommendation of unregistered supplier to a speciﬁed For the supplier it shall be treated as an exempt supply & not eligible for ITC u/s 17.

council cases of registered person
CCP 03.01.06.00
Does not matter whether the supplier Only where supplier is an unregistered
Is reverse charge applicable on payment of advance?
is registered or not person
Answer:- Reverse charge is applicable when there is a supply,
For supply of goods under reverse charge as per sec 12(3) the time of supply is date
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