Under the reverse charge mechanism in the GST regime, the liability to pay tax is of the recipient of goods & services rather than the supplier when the goods or services have been received from an unregistered person. Usually, the supplier is liable to pay tax and avail input tax credit, if applicable, but in this case the mechanism is reversed. Also, the GST Council has specified 12 categories of services for reverse charge that include radio taxi or passenger transport services provided through electronic commerce operators, taxable services provided by any person who is located in a non-taxable territory, services provided by an individual advocate or firm of advocates by way of legal services to any business entity, services provided or agreed to be provided by an arbitration tribunal directly or indirectly to any business entity, services provided by an insurance agent/recovery agent and services provided by government except renting of immovable property, services by Department of Posts, and services relating to transport of goods or passengers. If these services are provided through an e-commerce operator, it will be liable to pay the tax. No separate list for reverse charge for goods has been issued by the CBEC. If the supply of goods or services or both is exempt under GST, then the recipient is not liable to pay tax under the reverse charge mechanism. However, the CGST law mandates registration for those who are required to pay tax under reverse charge, even if their turnover is less than the threshold limit of Rs 20 lakh.
