Glossary · GST & Indirect Tax
Reverse Charge
GST payable by the recipient of goods or services instead of the supplier, as notified under Section 9(3) or 9(4) of the CGST Act.
Under reverse charge, the recipient must pay GST directly to the government and is also entitled to claim ITC on the same. Common examples: services by advocates or CA firms to a business, renting of motor vehicles, services received from outside India, supply of goods or services by an unregistered person to a registered person (Section 9(4), partially restricted by the 49th Council meeting from 1 November 2019).
Examples
A startup hiring a CA for tax audit pays GST under reverse charge at 18% and claims it as ITC.