What is reverse charge under GST?
The suppliers of the goods and services have to pay the taxes applicable to supply. But according to the reverse charge mechanism, the receiver of the goods or services has to pay the taxes.
When is a reverse charge applicable?
The reverse charge is applicable when the goods are supplied by an unregistered vendor to a registered vendor under the GST scheme i.e. the tax will be paid directly by the receiver of the supplied goods to the Government.
In order to do this, the registered vendor has to go through the self-invoicing process for the purchase of paying to GST under reverse charge.
For any inter-state purchase, the buyer will have to pay IGST, CGST for intra-state, and SGST under the RCM.
Also, if an e-commerce operator provides services, then that person has to pay the GST under reverse charge.
But, if the e-commerce operator is not physically present, then the person representing it is liable to pay the tax. And if there is no representative, the operator has to appoint a representative who will have to pay the GST.
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