Reverse Charge Mechanism on Services under GST

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rcm services

Reverse Charge Mechanism on Services under GST

A per section 9(3) of CGST Act 2017 & section 5(3) of IGST Act 2017, Government may on the recommendation of the council, specify categories of services on which tax is required to be paid on reverse charge basis.

By notification issued by the government following services are covered under reverse charge mechanism:

 Sr. No.  Description of supply of Service  Supplier of service  Recipient of service
 1 Goods Transport Agency  Services Goods Transport Agency (GTA) who has not paid  integrated tax at the rate of 12% Any factory, society, cooperative society, registered person, body corporate, partnership firm, casual taxable person;

located in the taxable territory

 2 Legal Services by advocate 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 An arbitral  tribunal Any business entity located in the taxable territory
 4 Any service supplied by any person who is located in a non-taxable territory to any person other than non taxable online recipient.  And Any person located in a non-taxable territory Any person located in the taxable territory other than non taxable online recipient.
 5 Services provided by way of sponsorship  Any person Anybody corporate or partnership firm.
 6 Services supplied by the Government excluding,

(1) renting of immovable property, and

(2) services specified

below-

(i) Services by Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or 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
 7

 

Services supplied by a director A director of a company or a body corporate Company or a body corporate
 8

 

Insurance Agent Services An insurance agent Any person carrying on insurance business
 9

 

Services supplied by a recovery agent  A recovery agent A banking company or a financial institution or a non-banking financial company

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