List of Goods and services under RCM in GST

Reverse Charge Mechanism is not a new concept for taxation system in India. Reverse Charge Mechanism was also prevailing in the service tax regime before introduction of GST in India. It is well aware to us that under indirect taxation system, it is the supplier who is liable to collect the tax from the recipient of goods or services and deposit the same to tax authorities. However, in some cases, the Government has been given power to notify certain goods or services where the supplier shall not be liable to pay tax rather the recipient of goods or services shall deposit the tax to the tax authorities. This mechanism in known as 'Reverse Charge Mechanism' or RCM in short. RCM has also been introduced under GST law. The definition of 'Reverse Charge' is given in Section-2(98) of the CGST Act, 2017. We are reproducing the definition of 'Reverse Charge' for the sake of readers as below:-

‘Reverse Charge’: - the liability to pay tax by the recipient of the supply of goods or services or both instead of the supplier of such goods or services or both under section 9(3) or 9(4) of CGST Act or under section 5(3) or 5(4) of IGST Act.

Since introduction of GST, the Central Government has notified a number of goods and services u/s 9(3) of CGST Act for the purpose of levy of GST under reverse charge mechanism. In this article, we are discussing such goods and services which have been notified by the Central Government for the purposes of RCM.

List of Goods under RCM in GST

Following goods have been notified by the Central Government where the recipient of goods shall be liable to pay GST under RCM:-

Sr. No.	Description of supply of Goods	Supplier of Goods	Recipient of Goods
1	Cashew nuts (not shelled or peeled)	Agriculturist	Any registered person
2	Bidi Wrapper Leaves (tendu), Tobacco Leaves	Agriculturist	Any registered person
3	Silk Yarn	Manufacturer of silk yarn from raw silk or silk worm cocoons	Any registered person
4	Lottery	State Government, Union Territory or local authority	Lottery distributor or selling agent
5	Raw Cotton	Agriculturist	Any registered person
6	Used vehicles, seized and confiscated goods, old and used goods, waste and scrap	Central Government, State Government, Union Territory or local authority	Any registered person
7	Purchase of priority sector lending certificate	Registered person	Any registered person

List of services under RCM in GST

Following is the list of services where the recipient of services shall be liable to pay GST under reverse charge:-

Sr. No.	Description of supply of services	Supplier of services	Recipient of services	GST Rates
1	Goods Transport Agency (GTA) services by road	Goods Transport Agency	Any factory, society, cooperative society, registered person under GST, body corporate, partnership firm including AOP, casual taxable person located in the taxable territory	5%
Note: Notification No. 22/2017- CT (Rate) w.e.f. 22.08.2017 - If GTA opts to charge GST in his invoice and pays GST @ 12%, the recipient is not liable to pay GST under RCM. Notification No. 32/2017- CT (Rate) dated 13.10.2017:- Services provided by GTA *to an unregistered person* (other than factory, society, co-operative society, body corporate, partnership firm, registered casual taxable person) shall be exempt from GST. If a department of central/ state government/ union territory or local authority etc. (who has obtained registration under GST as TDS deductor) receives services of transportation by road from GTA, no GST is payable thereon.
2	Legal services provided directly or indirectly, by advocate including a senior advocate or firm of advocates	An individual advocate including a senior advocate or firm of advocates	Any business entity located in the taxable territory shall be liable under reverse charge @ 18%.	18%
Note: - Meaning of Legal services: - ‘Legal services’ means any service provided in relation to advice, consultancy or assistance in any manner and includes representational services before any court, tribunal or authority. Notification No. 12/2017- CT (Rate) dated 28-06-2017: - Legal services provided to a person other than business entity is fully exempted from GST. Further, Legal services provided to a business entity with turnover up to Rs. 20 Lakhs (Rs. 10 Lakhs in special category states) in preceding financial years shall also be exempted. Services provided by senior advocate to any other advocate or firm of advocates are not exempt and are liable for GST under forward charge mechanism. Firm of Advocates includes LLP registered under LLP Act, 2008.
3	Services provided by an arbitral tribunal to a business entity	An Arbitral Tribunal	Any business entity located in the taxable territory.	18%
Notification No. 12/2017- CT (Rate) dated 28-06-2017: - Services provided by arbitral tribunal to a person other than business entity or to a business entity with aggregate turnover of up to Rs. 20 Lakhs (Rs. 10 Lakhs in special category states), shall be exempt from GST.
4	Sponsorship services provided to any Body corporate or partnership firm	Any person	Any Body Corporate or partnership firm located in taxable territory.	18%
5	Services supplied by the Central Government, State Government, Union Territory or local authority to a business entity excluding: 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 Central Government Services in relation to an aircraft or vessel, inside or outside the precincts of a port or airport Transport of goods or passengers	Central or State Government, Union Territory, Local Authority	Any Business Entity located in the taxable territory.	18%
5A	Renting of immovable property services by Central Government, State Government, Union Territory or Local Authority to a person registered under GST	Central or State Government, Union Territory, Local Authority	Any person registered under GST	18%
5B	Transfer of development rights or Floor Space Index (FSI) (including additional FSI) for construction of a project	Any Person	Promoter	18%
Note: Notification No. 6/2019- CT (Rate) w.e.f. 01-04-2019: - GST on development rights/ FSI to be paid by promoter w.e.f. 01-04-2019 under reverse charge.
5C	Long Term Lease (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.	Any Person	Promoter	18%
Note: Notification No. 6/2019- CT (Rate) w.e.f. 01-04-2019: - GST on long term lease by any person for construction project by a promoter shall be payable under reverse charge w.e.f. 01-04-2019 @18%.
6	Services supplied by a director of a company or a body corporate to the said company or body corporate	A director	The company or body corporate located in the taxable territory.	18%
7	Services by an insurance agent to any person carrying on insurance business	Insurance Agent	Any person carrying on insurance business	18%
8	Recovery Agent Services to a bank or financial institution or NBFC	Recovery Agent	Bank or Financial Institution or NBFC	18%
9	Copyright services by a music composer, photographer, artist or like 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	12%
9A	Supply of services by an author by way of transfer or permitting the use or enjoyment of a copyright covered under the Copyright Act, 1957 relating to original literary works to a publisher	Author of original literary work	Publisher located in the taxable territory.	12%
Note: - If the author is registered under CGST Act, he can exercise the option to pay tax under forward charge. For this, he will have to file a declaration in form at Annexure-I that he exercises the option to pay tax under forward charge and that he shall not withdraw the option within a period of 1 year from the date of exercising such option. Further, the author will have to make declaration in the invoice issued by him in Form Inv-1 to the publisher. This entry has been inserted w.e.f. 01-10-2019. This means that till 01-10-2019, the above service was only covered under reverse charge mechanism. However, For F.Y. 2019-20, the option to pay tax under forward charge shall be exercised by filing declaration upto 31.10.2019 for the remaining part of the year (1-11-2019 to 31-03-2020). [Refer Notification No. 22/2019- Central Tax (Rate)].
10	Supply of services by the members of Overseeing committee to RBI	Members of Overseeing Committee constituted by RBI	Reserve Bank of India	18%
11	Supply of services by individual Direct Selling Agents (DSA) other than a body corporate, partnership or LLP to a bank or NBFC	Individual DSA other than a body corporate, partnership or LLP to a bank or NBFC	Banking company or NBFC located in taxable territory	18% Inserted by Notification No. 15/2018- CT (Rate) dated 26.07.2018
12	Services provided by a business facilitator to a banking company	Business Facilitator	Banking company located in taxable territory	18% Inserted by Notification No. 29/2018- CT (Rate) dated 31.12.2018
13	Services provided by an agent of business correspondent to business correspondent	An agent of business correspondent	Business Correspondent located in taxable territory	18% Notification No. 29/2018- CT (Rate) dated 31.12.2018
14	Security services (by way of supply of security personnel)	Any person other than body corporate	Registered Person	18% Notification No. 29/2018- CT (Rate) dated 31.12.2018
Note: Nothing contained in this entry shall apply to: - A department or establishment of Central/ State Government or Union Territory or local authority or Government agencies, who have taken registration as ‘Tax Deductor’ u/s 51 of CGST Act and not for supply of goods or services and Registered person registered under Composition Scheme u/s 10 of CGST Act.
15	Services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient	Any person other than body corporate, who supplies the service to a body corporate and does not issue an invoice charging CGST @ 6% plus SGST to the service recipient	Any body corporate located in the taxable territory	5%
Note: The above entry has been inserted by Notification No. 22/2019- CT (Rate) dated 30.09.2019. It has been further amended Notification No. 29/2019- CT(Rate) dated 31.12.2019.
16	Services of lending of securities under Securities Lending Scheme, 1997 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 for the purpose of lending under the scheme of SEBI	Borrower i.e. a person who borrows the securities under the scheme through an approved intermediary of SEBI	18% Notification No. 22/2019- CT (Rate) dated 30.09.2019

All the goods and services notified for RCM purposes have also been notified under IGST Act. Further, the following additional services are also notified under IGST Act for levy of IGST under reverse charge: -

Nature of supply of services	Supplier of services	Recipient of services
Services supplied by a person located in non-taxable territory by way of transportation of goods by vessel from a place outside India up to the customs station of clearance in India	A person located in the non-taxable territory	Importer located in the taxable territory
Any service supplied by any person 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

GST applicability on remuneration to directors

Quick Links