Page 4 - Ch3_RCM

01. General Questions on Reverse Charge

CCP 03.01.01.00
What does reverse charge mean & Who is responsible to pay taxes under the GST Law?
Answer: Meaning of reverse charge:-
As per section 2(98) of CGST Act, 2017, “Reverse charge” means the recipient of supply of goods &/or
services is liable to pay GST instead of supplier u/s 9(3) or 9(4) of CGST Act.

The person responsible to pay taxes under the GST Law:-
Generally, the supplier of Goods &/or Services is liable to pay taxes under the GST Law. However, the
following are certain exceptions:-
(a) Reverse Charge:-

Under reverse charge mechanism, the recipient is liable to pay GST in the following cases:-
Ü Supply of goods &/or services notified by the Government on the recommendations of the GST
Council u/s 9(3) of CGST Act
Ü Supply of specified categories of goods &/or services by an unregistered supplier to specified class

of registered persons, as notified by the Government on recommendation of GST Council u/s
9(4) of CGST.

CCP 03.01.02.00
In accordance with the reverse charge provisions under GST Act, give answers to following with
reason:-
(i) Is GST on reverse charge basis payable on inter-State supply also?
(ii) Is reverse charge applicable on supply of goods also or is it only on supply of services?
(iii) In case supplier eligible to threshold exemption, is reverse charge applicable?

Answer:
(i) Yes, as the provisions relating to reverse charge are also applicable in case of inter-state supply as per
section 5(3) and 5(4) of the IGST Act.

(ii) Yes, as the government have notified supply of goods as well as services for payment of tax on reverse
charge basis.
(iii) Yes, Supplier may not have paid the tax due to threshold benefit but this does not excuse recipient from
the liability which is arising under reverse charge mechanism u/s 9(3)/ 9(4) of CGST Act.

CCP 03.01.03.00
GTA services provided to an unregistered person (including unregistered casual taxable person) are
exempt from GST by virtue of Entry 21 A of GST Laws. Discuss the validity of above statement.

[CA Inter May 23 Exam]
Answer:
Ü The said statement is invalid.
Ü Services provided by a GTA to an unregistered person, including an unregistered casual taxable person

are exempt except when provided to a:
a) Factory
b) Society

c) Co-operative society
d) Body corporate

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