{"id":5667,"date":"2019-02-26T15:01:02","date_gmt":"2019-02-26T09:31:02","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=5667"},"modified":"2021-09-01T23:31:37","modified_gmt":"2021-09-01T18:01:37","slug":"reverse-charge-mechanism","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/","title":{"rendered":"All about Reverse Charge Mechanism (RCM)"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e6c8a29097b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e6c8a29097b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/#Complete_Understanding_about_Reverse_Charge_Mechanism_RCM\" title=\"Complete Understanding about Reverse Charge Mechanism (RCM)\">Complete Understanding about Reverse Charge Mechanism (RCM)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/#What_is_Reverse_Charge\" title=\"What is Reverse Charge?\">What is Reverse Charge?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/#When_is_Reverse_Charge_Applicable\" title=\"When is Reverse Charge Applicable?\">When is Reverse Charge Applicable?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/#Time_of_Supply_under_Reverse_Charge\" title=\"Time of Supply under Reverse Charge:\">Time of Supply under Reverse Charge:<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/#Time_Of_Supply_in_case_of_Goods\" title=\" Time Of Supply in case of Goods\"> Time Of Supply in case of Goods<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/reverse-charge-mechanism\/#What_is_Self_Invoicing\" title=\"What is Self Invoicing:\">What is Self Invoicing:<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/REVERSE-CHARGE.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-8589\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/REVERSE-CHARGE.png\" alt=\"www.carajput.com; REVERSE CHARGE\" width=\"826\" height=\"404\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/REVERSE-CHARGE.png 321w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/REVERSE-CHARGE-300x147.png 300w\" sizes=\"(max-width: 826px) 100vw, 826px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Complete_Understanding_about_Reverse_Charge_Mechanism_RCM\"><\/span><a href=\"https:\/\/carajput.com\/publications\/a-guide-on-reverse-charge-mechanism-in-gst-regime.pdf\"><span style=\"color: #000080;\">Complete Understanding about Reverse Charge Mechanism (RCM)<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"What_is_Reverse_Charge\"><\/span><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\">What is Reverse Charge?<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">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, i.e., the chargeability gets reversed.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-16417\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM-300x169.png\" alt=\"Reverse Charge Mechanism (RCM)\" width=\"547\" height=\"309\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM-300x169.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM-768x432.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM-800x450.png 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM.png 810w\" sizes=\"(max-width: 547px) 100vw, 547px\" \/><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"When_is_Reverse_Charge_Applicable\"><\/span><a href=\"https:\/\/carajput.com\/publications\/a-guide-on-reverse-charge-mechanism-in-gst-regime.pdf\"><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\">When is Reverse Charge Applicable?<\/span><\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\"> Supply from an unregistered dealer to a Registered dealer<\/span><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">If a vendor who is not registered under <a href=\"https:\/\/carajput.com\/gst\/gst-consultancy.php\">GST<\/a>, supplies goods to a person who is<span style=\"text-decoration: underline;\">\u00a0<\/span>registered under GST, then Reverse Charge would apply. This means that the GST will have to be paid directly by the receiver to the Government instead of the supplier.<\/p>\n<p style=\"text-align: justify;\">The registered dealer who has to pay GST under reverse charge has to\u00a0do self-invoicing for the purchases made.<\/p>\n<p style=\"text-align: justify;\">For Inter-state purchases, the buyer has to pay IGST. For Intra-state purchased CGST and SGST has to be paid under RCM by the purchaser.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-16419\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM.-300x300.jpg\" alt=\"Complete Understanding about Reverse Charge Mechanism (RCM).\" width=\"646\" height=\"646\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM.-300x300.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM.-150x150.jpg 150w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM.-768x768.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Complete-Understanding-about-Reverse-Charge-Mechanism-RCM..jpg 800w\" sizes=\"(max-width: 646px) 100vw, 646px\" \/><\/p>\n<p><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\"> Services through an e-commerce operator<\/span><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">If an e-commerce operator supplies services then reverse charge will be applicable to the e-commerce operator. He will be liable to pay <a href=\"https:\/\/carajput.com\/gst\/gst-consultancy.php\">GST<\/a>.<\/p>\n<p style=\"text-align: justify;\">For example, UrbanClap provides services of plumbers, electricians, teachers, beauticians, etc. UrbanClap is liable to pay GST and collect it from the customers instead of the registered service providers.<\/p>\n<p style=\"text-align: justify;\">If the e-commerce operator does not have a physical presence in the taxable territory, then a person representing such an electronic commerce operator for any purpose will be liable to pay tax. If there is no representative, the operator will appoint a representative who will be held liable to pay GST.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-16422\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Services-through-an-e-commerce-operator1-300x162.jpg\" alt=\"Services through an e-commerce operator\" width=\"519\" height=\"280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Services-through-an-e-commerce-operator1-300x162.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Services-through-an-e-commerce-operator1-1024x551.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Services-through-an-e-commerce-operator1-768x414.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Services-through-an-e-commerce-operator1-800x431.jpg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/Services-through-an-e-commerce-operator1.jpg 1274w\" sizes=\"(max-width: 519px) 100vw, 519px\" \/><\/p>\n<p><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\"> Supply of certain goods and services specified by CBEC<\/span><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">CBEC has issued a\u00a0list of goods\u00a0and a\u00a0list of services\u00a0on which reverse charge is applicable.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Time_of_Supply_under_Reverse_Charge\"><\/span><span style=\"color: #ff9900;\"><strong><span style=\"text-decoration: underline;\">Time of Supply under Reverse Charge:<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h4><span class=\"ez-toc-section\" id=\"Time_Of_Supply_in_case_of_Goods\"><\/span><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\"> Time Of Supply in case of Goods<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p style=\"text-align: justify;\">In case of reverse charge, the time of supply shall be the\u00a0<strong>earliest<\/strong>\u00a0of the following dates:<\/p>\n<ul style=\"text-align: justify;\">\n<li>The date of <b>receipt of<\/b>\u00a0goods<\/li>\n<li>The date of\u00a0<strong>payment<\/strong><\/li>\n<li>The date immediately after\u00a0<strong>30\u00a0<\/strong>days from the date of issue of an <b>invoice by<\/b>\u00a0the supplier<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">If it is not possible to determine the time of supply, the time of supply shall be the\u00a0<strong>date of entry\u00a0<\/strong>in the books of account of the\u00a0<strong>recipient.<\/strong><\/p>\n<p style=\"text-align: justify;\"><strong>Illustration:<\/strong><\/p>\n<ol style=\"text-align: justify;\">\n<li>Date of receipt of goods 15th May 2018<\/li>\n<li>Date of invoice 1st June 2018<\/li>\n<li>Date of entry in books of receiver 18th May 2018<\/li>\n<\/ol>\n<p style=\"text-align: justify;\">The Time of supply of service, in this case, will be 15th May 2018<\/p>\n<p><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\"> Time Of Supply in case of Services:<\/span><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">In case of reverse charge, the time of supply shall be the\u00a0<strong>earliest<\/strong>\u00a0of the following dates:<\/p>\n<ul style=\"text-align: justify;\">\n<li>The date of\u00a0<strong>payment<\/strong><\/li>\n<li>The date immediately after\u00a0<strong>60\u00a0<\/strong>days from the date of issue of\u00a0<strong>invoice <\/strong>by the supplier<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">If it is not possible to determine the time of supply, the time of supply shall be the\u00a0<strong>date of entry\u00a0<\/strong>in the books of account of the\u00a0<strong>recipient.<\/strong><\/p>\n<p style=\"text-align: justify;\"><strong>Illustration:<\/strong><\/p>\n<ol style=\"text-align: justify;\">\n<li>Date of payment 15th July 2018<\/li>\n<li>Date of invoice 15st May 2018<\/li>\n<li>Date of entry in books of receiver 18th July 2018<\/li>\n<\/ol>\n<p style=\"text-align: justify;\">The Time of supply of service, in this case, will be 15th May 2018<\/p>\n<p>Also read about :\u00a0<a href=\"https:\/\/carajput.com\/blog\/gst-annual-return-gstr-9\/\">Annual Return of Gst GSTR-9<\/a><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"What_is_Self_Invoicing\"><\/span><a href=\"https:\/\/GSTR enable details to be auto-populated in E-invoice GSTR-1\"><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\">What is Self Invoicing:<\/span><\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">Self-invoicing is to be done when you have purchased from an unregistered supplier and such purchase of goods or services falls under reverse charge.<\/p>\n<p style=\"text-align: justify;\">This is due to the fact that your supplier cannot issue a <a href=\"https:\/\/carajput.com\/gst\/gst-compliances.php\">GST-compliant<\/a> invoice to you, and thus you become liable to pay taxes on their behalf. Hence, self-invoicing, in this case, becomes necessary.<\/p>\n<figure id=\"attachment_16415\" aria-describedby=\"caption-attachment-16415\" style=\"width: 552px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-16415\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/gst-reverese-charge12-300x159.png\" alt=\"Penalties under RCM \" width=\"552\" height=\"293\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/gst-reverese-charge12-300x159.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/02\/gst-reverese-charge12.png 600w\" sizes=\"(max-width: 552px) 100vw, 552px\" \/><figcaption id=\"caption-attachment-16415\" class=\"wp-caption-text\"><span style=\"color: #000080;\"><strong>You may also like the following Blogs: <\/strong><\/span><a style=\"font-size: 16px;\" href=\"https:\/\/carajput.com\/learn\/einvoices-details-are-autopopulated-in-the-respective-gstr1-tables.html\">E-invoice details are auto-populated in the respective GSTR-1<\/a><\/figcaption><\/figure>\n<ul>\n<li><a href=\"https:\/\/carajput.com\/blog\/gst-late-fee-capped-at-rs-500-for-each-gstr-3b-return-and-waives-off-late-fee-on-late-gst-return-filing\/\">GSTR-3 return late fees and wavier off late fees on late GST return filing<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/blog\/key-takeaways-of-gstr-4-annual-composition-scheme-dealers\/\">Key takeaways about GSTR-4 Annual composition Scheme<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/blog\/\">Extension of the due date of GSTR-1<\/a><\/li>\n<li><\/li>\n<li><a href=\"https:\/\/carajput.com\/blog\/blocking-the-e-way-bill-creation-system-if-fails-to-file-gstr-3b-gstn\/\">Blocking the E-way bill creation system if fails to file GSTR-3B<\/a><\/li>\n<li>a <a href=\"https:\/\/carajput.com\/learn\/prevent-common-errors-when-filing-with-gstr1.html\">common mistake is done while filing GSTR-1<\/a><\/li>\n<li><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Complete Understanding about Reverse Charge Mechanism (RCM) What is Reverse Charge? 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, i.e., the chargeability gets reversed. When is Reverse Charge Applicable? Supply from an unregistered dealer to a Registered &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172],"tags":[7141,7140,7142,7143,7144,6690,7138,7145,7139],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/5667"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=5667"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/5667\/revisions"}],"predecessor-version":[{"id":16423,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/5667\/revisions\/16423"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=5667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=5667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=5667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}