The document outlines the Reverse Charge Mechanism (RCM) under GST, where the liability to pay GST shifts from the supplier to the recipient for specified goods and services. It details the types of supplies affected by RCM, including certain categories of agricultural products, transport services, legal services, and real estate transactions, along with their applicable GST rates. The document also specifies conditions under which the RCM applies and exemptions based on the nature of the recipient or the service provided.

1. Reverse Charge under GST

2. Legends Used
AOP Association of Persons
CBIC Central Board of Indirect Taxes and Customs
CG Central Government
FSI Floor Space Index
GST Goods and Service Tax
GTA Goods Transport Agency
ITC Input Tax Credit
LA Local Authority
RCM Reverse Charge Mechanism
SG State Government
UT Union Territory

3. Presentation Schema
Introduction Flow of GST Reverse Charge Specified Goods
Specified Services
Additional
Services under
RCM for IGST
Specified
Registered
Recipient

4. Introduction
Under GST, the supplier of goods or services is liable to pay the tax to the Government.
However, under the reverse charge mechanism (RCM), the liability to pay GST is cast on
the recipient of the goods or services.
Reverse charge means the liability to pay tax is on the recipient of supply of goods or
services instead of the supplier of such goods or services, in respect of notified categories of
supply.
The burden to pay GST ultimately lies on the recipient only
Therefore, under RCM, only the compliance requirements, [i.e. to obtain registration under GST,
deposit the tax with the Government, filing returns, etc.] have been shifted from supplier to recipient.
However, the underlying principle of indirect tax is that tax burden has to be ultimately borne by the recipient.

5. Flow of GST
Recipient of
Goods/Services
Govt
Supplier of
Goods/Services
Consideration
+
GST
GST
Recipient of
Goods/Services
Govt
Supplier of
Goods/Services
Goods /
Services
Consideration
GST
Reverse Charge
Normal Charge
Goods /
Services

6. Reverse Charge
There are two type of reverse charge scenarios
In case of supply of specified
categories of goods or services
In case of supply of specified categories of goods
or services made by an unregistered supplier to
specified class of registered recipients
• Sec 9(3) of the CGST/SGST (UTGST)
Act.
• Similar provisions u/s 5(3) of the IGST Act
• Sec 9(4) of the CGST/SGST (UTGST)
Act.
• Similar provisions u/s 5(4) of the IGST Act
means the liability to pay tax by the recipient of supply of goods or
services or both instead of the supplier of such goods or services or
both under Sec 9(3) or 9(4), or Sec 5(3) or 5(4) of the IGST Act
Reverse
Charge
Sec 2(98) of
CGST Act
Notification No. 07/2019 Central Tax (Rate)
Services - Notification No. 13/2017 Central Tax (Rate)
Goods - Notification No. 04/2017 Central Tax (Rate)

7. Specified Goods under RCM
• Notification No. 04/2017 Central Tax (Rate)
• Notification No. 04/2017 Integrated Tax (Rate)

8. Specified Goods under RCM
Description Supplier Recipient
Cashew nuts, not shelled or
peeled
Agriculturist Any registered person
Bidi wrapper leaves (tendu) Agriculturist Any registered person
Tobacco leaves Agriculturist Any registered person
Silk yarn
Any person who manufactures silk
yarn from raw silk or silk worm
cocoons for supply of silk yarn
Any registered person
Supply of lottery
State Government, Union Territory
or any local authority
Lottery distributor or selling agent*
Used vehicles, seized and
confiscated goods, old and used
goods, waste and scrap
Central Government, State
Government, Union territory or a
local authority
Any registered person
Raw cotton Agriculturist Any registered person
*Distributor or selling agent means an individual or a firm or a body corporate or other legal entity under law
so appointed by the State Govt through an agreement to market and sell lotteries on behalf of the State Govt

9. Specified Services under RCM
• Notification No. 13/2017 Central Tax (Rate)
• Notification No. 10/2017 Integrated Tax (Rate)
Entry No.s pertain to CGST notification

10. Goods Transport Agency (GTA Services)
Supply of services by a GTA in respect of transportation of goods by road to-
Any factory
registered
under or
governed by
the Factories
Act, 1948; or
Any society
registered
under the
Societies
Registration
Act, 1860 or
under any
other law for
Any co-operative
society established
by or under any
law; or
Any
registered
person
Any body
corporate
established, by
or under any
law; or
Any partnership
firm whether
registered or not
under any law
including AOP
or
Any casual
taxable person
GTA who has not paid GST at the rate of 12% (explained in next
slide)
Specified Recipients
Specified Recipients
Supplier
Recipient
Entry No. 1
a Department or Establishment of the CG/SG/UT or LA or Governmental agencies which has taken GST registration only for the
purpose of deducting tax under Sec 51 (1% TDS on payments over ₹2,50,000) and not for making a taxable supply of goods or services
RCM shall not apply to services provided by a GTA, by way of transport of goods in a goods carriage by road,
to*
*Note: Further, these services have been simultaneously exempted from payment of tax. Thus, there will be no tax liability in this
case

11. Liability to Pay Tax in GTA Services
GTA services are taxable at the following two rates under GST:
Other than Specified Recipients
(unregistered individual end consumer)
12% where GTA opts to pay GST at said
rate on all the services of GTA supplied by it
and there is no restriction on claiming ITC
5% provided GTA has not taken the ITC on
goods and services used in supplying GTA
service
Specified Recipients Specified Recipients
Reverse Charge Forward Charge
Recipient is
liable to pay GST
GTA is liable to
pay GST
Exempt from GST

12. Legal Services
Individual advocate including a senior advocate or firm of advocates
Any business entity located in the taxable territory
Supplier
Recipien
t
Entry No.
2
Services provided by an individual advocate including a senior advocate
or firm of advocates by way of legal services, directly or indirectly
“legal service” means any service provided in relation to advice, consultancy or
assistance in any branch of law, in any manner and includes
representational services before any court, tribunal or authority.
Entry No.
3
Services supplied by an arbitral tribunal to a business
entity

13. Sponsorship
Entry No.
4
Services provided by way of sponsorship to any
body corporate or partnership firm
Any Person
Any body corporate or partnership firm located in the taxable territory
Supplier
Recipien
t

14. Government
Entry No.
5
Services supplied by the CG/SG/UT/LA to a business entity
Renting of
immovable
property
• Services by the Department of Posts by way of speed
post, express parcel post, life insurance, and agency
services provided to a person other than CG/SG/UT/LA
• Services in relation to an aircraft or a vessel, inside or
outside the precincts of a port or an airport
• Transport of goods or passengers.
Exceptions
Entry No. 5A
Services supplied by CG/SG/UT/LA by way of renting
of immovable property to a Registered Person
CG/SG/UT/LA
Business Entity
Supplier
Recipien
t
CG/SG/UT/LA
Registered
Person
Supplier
Recipien
t

15. Real Estate
Entry No. 5B
• Services supplied by any person
• by way of transfer of development rights or Floor
Space Index (FSI) (including additional FSI)
• for construction of a project by a promoter Any Person
Promoter
Supplier
Recipien
t
Entry No. 5C
• Long term lease of land (30 years or more) by any person
• against consideration in the form of upfront amount (called
as premium, salami, cost, price, development charges or
by any other name) and/or periodic rent
• for construction of a project by a promoter
Floor space index (FSI) shall mean the ratio of a building’s total floor
area (gross floor area) to the size of the piece of land upon which it is
built

16. Meaning of Promoter
Sec 2(zk) of the The Real Estate (Regulation and Development) Act, 2016
“promoter” means,—
(i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or
converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other
persons and includes his assignees; or
(ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for
the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or
(iii) any development authority or any other public body in respect of allottees of—
(a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or
placed at their disposal by the Government; or
(b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling
all or some of the apartments or plots; or
(iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs
apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or
(v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other
name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment
is constructed or plot is developed for sale; or
(vi) such other person who constructs any building or apartment for sale to the general public.

17. Banking Intermediaries
Entry No. Description Supplier Recipient
11
Services supplied by individual Direct Selling
Agents (DSAs) other than a body corporate,
partnership or limited liability partnership
(LLP) firm to bank or non- banking financial
company (NBFCs)
Individual DSAs
other than a body
corporate,
partnership or LLP
firm
A banking company or
a NBFC, located in the
taxable territory
12
Services provided by business facilitator (BF)
to a banking company
Business
facilitator(BF)
A banking company,
located in the taxable
territory
13
Services provided by an agent of business
correspondent (BC) to business
correspondent (BC)
An agent BC
A business
correspondent, located
in the taxable territory
• Business Correspondents and Business facilitators are representatives of a
bank, responsible for building awareness, sourcing prospective customers.
• In addition, business correspondents are also responsible for carrying out banking
transactions for existing customers
• A direct selling agent or DSA is a person who works as a referral agent for a bank
or NBFC. The job of a DSA is to find potential customers for the bank they represent

18. Individual Service Providers
Entry No. Description Supplier Recipient
6
Services supplied by a director of a
company or a body corporate to the said
company or the body corporate
A director of a
company or a
body corporate
The company or a
body corporate located
in the taxable territory
7
Services supplied by an insurance agent to
any person carrying on insurance business
An insurance
agent
Any person carrying on
insurance business,
located in the taxable
territory.
8
Services supplied by a recovery agent to a
banking company or a financial institution or a
non-banking financial company
A recovery agent
A banking company or
a financial institution or
a non-banking financial
company, located in the
taxable territory
10
Supply of services by the members of
Overseeing Committee to RBI
Members of
Overseeing
Committee
constituted by RBI
RBI

19. Copyright Services
Entry No. Description Supplier Recipient
9
Supply of services by a music composer,
photographer, artist or the like by way of transfer
or permitting the use or enjoyment of a
copyright relating to original dramatic, musical
or artistic works to a music company, producer or
the like
Music composer,
photographer,
artist, or the like
Music company,
producer or the
like, located in
the taxable
territory
9A
Supply of services by an author by way of transfer
or permitting the use or enjoyment of a copyright
relating to original literary works to a publisher
Author
Publisher
located in the
taxable territory
RCM shall not apply if the author
has obtained GST registration and
issued invoice to the publisher

20. Security Services
Entry
No.
Description Supplier Recipient
14
Security services (services provided by
way of supply of security personnel)
provided to a registered person
Any person
other than a
body corporate
A registered
person, located in
the taxable territory
RCM in this case shall not apply to:
• a Department or Establishment of the CG/SG/UT or LA or Governmental
agencies which has taken GST registration only for the purpose of deducting tax
under Sec 51 (1% TDS on payments over ₹2,50,000) and not for making a
taxable supply of goods or services
• a registered person paying tax under Composition Levy
(tax will be payable on forward charge basis)

21. Miscellaneous
Entry
No.
Description Supplier Recipient
15
Services provided by way
of renting of a motor
vehicle provided to a
body corporate
Any person (other than a body
corporate, paying GST at 5% on renting
of motor vehicles with ITC only of input
service in the same line of business)
Any body corporate
located in the
taxable territory
16
Services of lending of
securities under
Securities Lending
Scheme of SEBI
Lender i.e. a person who deposits the
securities registered in his name or in
the name of any other person duly
authorised on his behalf with an
approved intermediary of SEBI
Borrower i.e. a person
who borrows the
securities under the
Scheme through an
approved intermediary
of SEBI

22. Additional Services under RCM for IGST
• Notification No. 10/2017 Integrated Tax (Rate)
 All the previously discussed services have also been notified for
reverse charge under IGST
 In addition to them, following additional services are also notified

23. Entry No.* Description Supplier Recipient
1
Any service supplied by any person who
is located in a non-taxable territory to any
person other than non-taxable online
recipient
Any person located
in a non-taxable
territory
Any person located in
the taxable territory
other than non-taxable
online recipient**
Example – B Ltd in India obtains a Web hosting services from Q Ltd, a US company. B Ltd
shall pay GST on such services on RCM Basis.
However, RCM will not apply for OIDAR services (such as Netflix) received by non-taxable
recipients (unregistered persons for personal use). Tax is to be paid under Forward Charge.
10
Services supplied by a person located in
non-taxable territory by way of
transportation of goods by a vessel
from a place outside India up to the
customs station of clearance in India
A person located in
non-taxable
territory
Importer
* of IGST notification
Additional Services under RCM for IGST
** means any Govt, LA, governmental authority, an individual or any other person not registered and
receiving online information and database access or retrieval (OIDAR) services in relation to any purpose
other than commerce, industry or any other business or profession, located in taxable territory

24. Supply by Unregistered Supplier to Specified
Class of Registered Recipients
• Notification No. 07/2019 Central Tax (Rate)
• Notification No. 07/2019 Integrated Tax (Rate)

25. Background
GST in Real Estate Sector
The effective rate of GST on real estate sector for the new projects by promoters are as follows:
(i) 1% without ITC on construction of affordable houses (area 60 sqm in metros/ 90 sqm in non-metros and
value upto ₹45 lakh).
(ii) 5% without ITC is applicable on construction of:
• all houses other than affordable houses, and
• commercial apartments such as shops, offices etc. in a residential real estate project in which the carpet
area of commercial apartments is not more than 15% of total carpet area of all apartments.
Conditions:
Above tax rates shall be available subject to following conditions:
 ITC shall not be available.
 80% of inputs and input services (other than services by way of grant of development rights, long term
lease of land (against upfront payment in the form of premium, salami, development charges etc.) or FSI
(including additional FSI), electricity, high speed diesel, motor spirit, natural gas), used in supplying the
service shall be purchased from registered persons

26. Specified Recipient of goods and services Promoter (as defined earlier)
Category of supply of goods and services
If value of inputs and input services purchased from registered supplier is
less than 80%, promoter has to pay GST on RCM on all such inward
supplies (to the extent short of 80% of the inward supplies from registered
supplier)
Where cement is received from an unregistered person, the promoter shall
pay tax on supply of such cement on RCM
GST on capital goods shall be paid by the promoter on RCM
Specified Class of Registered Recipient