Reverse charge :
♦ Normally, tax is payable by supplier of goods or services or both. However, in some cases, the recipient is made liable to pay tax. This is termed as ‘reverse charge’.
♦ When tax is payable under reverse charge basis, the exemption available to small taxable persons (20 or 10 lakhs) is not available.
♦ When tax is payable under reverse charge basis, it has to be paid by cash i.e. through electronic cash ledger only.
♦ Once tax is paid, its input tax credit is available if such supply of goods or services or both are otherwise eligible for input tax credit.
♦ All recipients receiving supply from unregistered persons are liable to pay tax under reverse charge.