CHARGE OF GST

(Including reverse charge)

Intra –state supply:

Where the location of the supplier and the place of supply of goods or services are in the same State / Union
Territory, it is treated as intra-state supply of goods or services (CGST + SGST).

Inter – State supply:

Where the location of the supplier and the place of supply of goods and services are in
(i) Two different states or
(ii) Two different Union territories or
(iii) A state and a Union territory,
it is treated as inter state supply of goods or services respectively. [IGST]
EXTENT & COMMENCEMENT OF CGST ACT/ SGST ACT / UTGST ACT: [SEC 1 OF CGST ACT]:

1. Central Goods & Service Tax Act, 2017 extends to the whole of India ( including the State of Jammu and
Kashmir)
2. State GST Law of the respective state / Union territory with state Legislature (Delhi & Puducherry) extends to
whole of the state/ Union Territory.
3. Union Territory Goods & Services tax Act, 2017 extends to the Union territories of the Andaman and
Nicobar Islands, Lakshadeep, Dadra and Nagar Haveli, Daman and Diu, Chandigarh and other territory, i.e., the
Union territories without state Legislature.
LEVY & COLLECTION OF GST [SEC 9 OF CGST ACT] :

1. Central goods and Service Tax ( CGST) shall be levied on Intra-state supplies of goods or services or both.
2. Value of Levy is the Transaction Value u/s 15 of CGST Act.
3. Rates of CGST are rates as may be notified by the Government on the recommendation of the GST council.
Maximum rate of CGST will be 20%.

Liability to pay GST

Forward Charge (FC) - Taxable person making supply

Reverse Charge (RC) – Recipient of Supply
E- Commerce (EC) – Electronic commerce operator (ECO).

(Note : General Rule - Forward Charge ; Exception - Reverse Charge).

 Reverse Charge – Sec 9(3) and 9(4)
REVERSE CHARGE MECHANISM – RCM
Meaning:
Reverse Charge : Tax payable by recipient of supply of goods or services or both.

Recipient of supply of goods [sec 2(93) of CGST Act]:

Recipient of supply of goods and/or services means-

(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay
that consideration,

(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or
made available, or to whom possession or use of the goods is given or made available, and

(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,

and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of
the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or
services or both supplied.
RC applies in 2 cases:

1. Sec 9(3) – CG may on recommendation of GST coucil apply Reverse charge on certain specified categories. [RCM for
services are notified]
2. Sec 9 (4) – Reverse charge in case of procurements from Unregistered person (URP) to Registered person (RP).

RCM provision on supplies from unregistered person to restricted to

• Some specific class of registered person and
• for specific category of goods or services
• To be notified by Government.

Shifting of compliance requirement from supplier to recipient in case of RC

GST being an indirect tax, burden of the tax has to be passed on to Recipient. Under reverse charge also, the burden to
pay GST is on recipient, but compliance requirements i.e., to obtain registration under GST, deposit tax, filing returns
with the Government, etc. has been shifted from supplier to recipient.
GST ON REVRSE CHARGE ON NOTIFIED GOODS [S9(3) / S 5(3)]

CGST / IGST shall be paid by the recipient of the following notified goods on reverse charge basis

S No. Description of supply of Supplier of Goods Recipient of goods

goods
6. • Used Vehicles, • Central Government, Any RP
• seized and • State Government,
confiscated goods, • Union Territory or a
• old and used goods, • Local authority
• waste and scrap

8 Cement An unregistered supplier Promoter/ Builder

RCM for Services u/s 9(3) / 5(3):

S No. Category of supply of services Supplier of service Recipient of service

1 Supply of Services by a goods transport Goods Transport Agency (GTA) who has (a) Any factory registered under or governed by
agency (GTA) in respect of transportation not paid CGST @ 6%. the Factories Act, 1948(63 of 1948); or
of goods by road to (b) any society registered under the Societies
(a) any factory registered under or This provides options for GTA to opt for Registration Act, 1860 (21 of 1860) or under any
governed by the Factories Act, 1948(63 of either 5% (without ITC) or 12% (with ITC). other law for the time being in force in any part
1948); or of India; or
(b) any society registered under the (c) any co-operative society established by or
Societies Registration Act, 1860 (21 of under any law; or
1860) or under any other law for the time (d) any person registered under the
being in force in any part of India; or CGST/IGST/SGST/UTGST Act; or
(c) any co-operative society established by (e) any body corporate established, by or under
or under any law; or any law; or
(d) any person registered under the Central (f) any partnership firm whether registered or
Goods and Services Tax Act or the not under any law including association of
Integrated Goods and Services Tax Act or persons; or
the State Goods and Services Tax Act or (g) any casual taxable person; located in the
the Union Territory Goods and Services Tax taxable territory.
Act; or **
(e) anybody 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.
S No. Category of supply of services Supplier of service Recipient of service
2 Services supplied by an individual An individual advocate including Any business entity
advocate including a senior advocate or a senior advocate or firm* of located in the taxable
firm* of advocates by way of legal advocates. territory.
services, directly or indirectly, including
where a contract for provision of such
service has been entered through
another advocate or a firm of advocates,
or by a firm of advocates, by way of legal
services, to a business entity.”

Explanation: “legal service” means any

service provided in relation to advice,
consultancy or assistance in any branch
of law, in any manner and includes
representational services before any
court, tribunal or authority.”.

*Firm of advocates includes LLP

registered under the The Limited Liability
Partnership Act, 2008
 S No. Category of supply of services Supplier of service Recipient of service

3 Services supplied by an arbitral An arbitral tribunal Any business entity located in the
tribunal to a business entity. taxable territory.
4 Services provided by way of Any person. Anybody corporate or partnership
sponsorship to anybody firm located in the taxable territory.
corporate or partnership firm.
5 Services supplied by the Central Central Government, state Any business entity located in the
Government, state government, government, Union territory taxable territory.
Union territory or local authority or local authority.
to a business entity excluding, -
(1) renting of immovable
property, and
(2) services as specified below-
(i) services by the Department
of Posts;
(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.
 S No. Category of supply of services Supplier of service Recipient of service

5A Services supplied by the Central Central Government, State Any person registered under
Government, State Government, Government, Union the CGST Act, 2017.
Union territory or local authority territory or local
by way of renting of immovable authority.
property to a person registered
under the Central Goods and
Services Tax Act, 2017 (12 of
2017).
5AA Renting of a residential Any persons Any GST registered person
dwelling to a registered person
(Added by CGST (Rate)
Notification no. 5/2022 dated
13th July 2022)
6 Services supplied by a director A director of a company or a The company or a body corporate
of a company or a body corporate body corporate. located in the taxable territory.
to the said company or the body
corporate.
S No. Category of supply of services Supplier of service Recipient of service

7 Services supplied by an An insurance agent. Any person carrying on insurance

insurance agent to any person business, located in the taxable
carrying on insurance territory.
business.
8 Services supplied by a recovery A recovery agent. A banking company or a financial
agent to a banking company or a institution or a non-banking financial
financial institution or a non- company, located in the taxable
banking financial company. territory.
9 Supply of services by a music Music composer, Music company, producer, or the like,
composer, photographer, artist or photographer, located in the taxable territory.
the like by way of transfer or artist, or the like.
permitting the use or enjoyment
of a copyright covered under
section 13(1)(a) of the Copyright
Act, 1957 relating to original
dramatic, musical or artistic works
to a music company, producer or
the like.
S No. Category of supply of services Supplier of service Recipient of service

9A Supply of services by an author by Author. Publisher located in the taxable territory

way of transfer or permitting the Provided that nothing contained in this entry
use or enjoyment of a copyright shall apply where,
covered under Section 13(1)(a) (1) the author is a registered person under
of the Copyright Act, 1957 relating GST and filed a declaration, that he exercises
to original literary works to a the option to pay tax under forward charge
publisher. and he shall not withdraw the option within
1 year from the date of
exercising option;
(2) the author makes a declaration to issue
the invoice to the publisher in
Form GST Inv-I.
10 Supply of services by the Members of the Reserve Bank of India.
members of Overseeing Overseeing Committee
Committee to Reserve Bank of constituted by the
India. Reserve Bank of India.
13 Services provided by an agent An agent of business A business correspondent, located in the
of business correspondent (BC) to Correspondent (BC). taxable territory.
business correspondent (BC).
Example:

1. In case of sponsorship services provided by Mr. A to M/s AB Ltd ., liability to pay GST is on ____________ .
2. In case of renting of land, inside an industrial estate, by State Government to a registered manufacturing
company, GST is applicable under __________. [forward charge/ reverse charge]
3. In case of services by an insurance agent to Ms. ABC insurance Co., Ltd GST is to be paid by _______.
4. Sitting fees received by director of XYZ Ltd., is liable for GST in the hands of the _______.
5. Services by a recovery agent to M/s. ZZZ Bank Ltd., is laible for GST in the hands of the _________ .
6. In case of lottery procured from State Government by a lottery distributor, GST is payable by _______ .
7. Reverse charge under section 9(3) of CGST act is applicable on notified ____________.
8. If tobacco leaves procured from an Agriculturist by a registered person, then ________. [forward charge/
reverse charge]
9. Reverse charge is applicable ___________. [ on intra state supply / interstate supply / or both the inter
and intra state supply].