Normally, the supplier of goods or services pays the tax on supply. In the case of Reverse Charge, the receiver becomes liable to pay the tax Means chargeability reversed in RCM
Reverse Charge under GST is a very important topic. There are certain goods & services which attract reverse charge. However, this is not all.
As per Sec 9(4) of CGST Act, if a registered person purchases goods/services from an unregistered dealer (URD) then the registered taxpayer is liable to pay GST on reverse charge basis. All the provisions of the Act will apply to such recipient as if he were the person liable for paying the tax in relation to the supply of goods or services.
This provision will apply if the below conditions are met:
There should be a supply of goods or services
The supply should be in respect of taxable goods/services
Supply must be by an unregistered person.
Supply must be to a registered person
Supply must be an intra-state supply as compulsory registration is required for inter-state sales.
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