Under GST law, generally supplier (seller of goods or services or both) collects tax from recipient (buyer/ customer of goods or service or both) and pay to the Government (net of ITC) (but ultimately GST is borne by end customer or consumer that is why it is called indirect tax) this mechanism is known as forward charge.
But in few cases due to administrative difficulties (e.g. supplier is located outside India, large number of small suppliers etc.), GST law has imposed responsibility on recipient of goods or services or both to pay GST by himself directly to the Government not by supplier so this mechanism is known as reverse charge or also referred as reverse charge mechanism (RCM).
Source Taxguru
Latest Posts in "India"
- GSTN Releases Key FAQs on GSTR 9/9C Filing for Financial Year 2024-25
- Supreme Court: VAT Credit Cannot Be Denied Due to Supplier’s Tax Default
- Trickiest countries in which to achieve compliance
- India announces changes in the Invoice Management System
- GST: India’s Grand Federal Bargain Becomes Imperfect Political Compromise After Eight Years
