What is Reverse Charge Mechanism under GST?

GST is an indirect tax, whereby seller recovers tax on goods / services supplied…

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GST is an indirect tax, whereby seller recovers tax on goods / services supplied to the buyer, and then
deposits the tax so recovered to the Government of India. While this is the primary way tax is collected
and paid, there is an exception to this mode, namely reverse charge mechanism.

Under reverse charge mechanism, the buyer of goods / services is required to deposit GST directly to the
tax authorities, and the seller need not collect the tax, nor undertake any related compliances.

These principles can be understood in detail when you join GST classes at Super 20 Training Institute.
However, a brief is provided below to get you started.

History and Genesis

Following the normal process (also referred to as the forward charge) may still leave some
transactions untaxed. In a country as vast as India, with unorganized businesses, reverse charge acts
as an effective mechanism to plug the loopholes and implement the law.

Reverse charge mechanism existed in the pre-GST era as well, i.e. in the service tax regime.


Liability to pay tax on the buyer / recipient of goods and services arises under the reverse charge
mechanism under the following scenarios:

(i) Based on nature of goods / services supplied, or nature of supplier
Some examples are:
– supply of a service by a non-resident to any person in India
– supply of legal services by an advocate to any business in India
– supply of services by a director of a company to the company in India

(ii) Where a taxable supply is made by an unregistered dealer to a registered dealer [applicability
deferred to 30 September 2019]

When a registered dealer procures a taxable good or service from an unregistered dealer, the
liability to pay GST shifts to him under reverse charge mechanism and he is required to pay GST,
instead of the unregistered supplier. The exception to these cases is when the total procurements
by the registered dealer in a day do not exceed Rs 5,000 (whether from one or all unregistered

The above list is only indicative and not exhaustive. You could learn more at Super 20’s GST classes.

Further, where reverse charge mechanism is applicable, GST would need to be deposited on any
advances paid to the supplier too.

Compliances required / Other aspects

A recipient required to pay GST under reverse charge mechanism must obtain GST registration and
undertake all compliances like any other registered dealer.

GST under reverse charge mechanism needs to be paid in cash, and input tax credit cannot be used to
pay the same. However, once paid, input tax credit can be claimed against GST so paid. The exception to this is the case of a GST composition dealer who is generally not allowed to claim input tax credit,
and therefore cannot claim credit of taxes paid under reverse charge mechanism either. Further,
when a composition dealer has to pay GST under reverse charge mechanism, he must pay at full rates
(and not at lower rates applicable to him).

One more important aspect is the Time of Supply – the point when GST is payable. This differs under
reverse charge mechanism from the usual principles under forward charge.

Of course, there are many more technicalities to these provisions. If you have any queries, do reach out
to us and we could guide you further with the right set of GST training that you should opt for,
considering your background, experience and future plans. Super 20 Training Institute offers the best
tax course and would be just the right choice for this purpose.

The Benefits Of Learning Accounting Via An Institute

Accounting is no more simply limited to maintaining bookkeeping, profit and loss and balance…

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best accounting course in ahmedabad

Accounting is no more simply limited to maintaining bookkeeping, profit and loss and balance sheet. As many companies now turn global, the transactions get more complex. Therefore, an accountant is now expected to possess the knowledge of how to handle such intricate transactions. Even the local companies are now in a dilemma as to how to handle the accounts after the launch of GST.

Every now and then we hear of bankruptcy of highly reputed banks. The ability to detect such fraud at an early stage is also what one expects out of an accountant. Lot of job opportunities are out in the market and unfortunately very few are well qualified for it. 

Possessing a degree is one thing but to be able to practically handle the transactions is where the actual skill is. If you aspire to be one of those rare but an accountant with exceptional skills, one needs to know what is beyond the books. That is where the catch is! 

Super 20 is one such institute that offers accounting courses in Ahmedabad and other various courses for all who are eager to learn about accounting and related courses.

The following are the key features which are offered by S20-

  • Accounting 
  • GST
  • Taxation 
  • Tally
  • Banking and finance
  • Courses for basic learners, experienced and advance learners
  • Communication skills, personality development, computer skills

What are the benefits of enrolling yourself with for Super20 courses?

  • Expert faculties

They claim all their faculties are qualified Chartered Accountants with expert knowledge. Learning directly from the experts mouth eradicates the chances of errors and provides conceptual clarity on the fundamentals.

  • Step by step approach and customized courses

Super20 courses take you step by step from basic level of courses to advanced level. If someone wants to skip the basic level, he can directly take up the advanced level course to get updated with technical concepts after clearing some procedures.

  • Real life case studies

As discussed above, S20 aims at learning the practical way i.e., without the books. This helps the students to crack the real corporate world scenarios way before they enter the corporate world. This makes them confident when they join their job or speak to their clients.

  • Doubt solving

The faculties are completely dedicated to each and every student and take keen interest to solve their doubts whether small or big. The focus is on bringing conceptual clarity and confidence in each student.  

  • Reasonable fees

Their fees are reasonable compared to many other institutes. Also, one doesn’t need to pay again if at all he is unable to grasp the course in the given period. Super20 courses are supremely beneficial for slow learners.

  • Communication skills and personality development

S20 makes sure that when you leave their premise, you are fully prepared to enter the corporate world, which is why they offer special course on communication skills and personality development.

  • Confidence

The Super20 courses are a combination of such courses which guarantees confidence to the student. One is able to handle the complex transactions like Merger and Acquisitions, accounting of international businesses by Indian company, etc.

  • 100% placement assistance

They provide a 100% placement assistance to provide you with job once you finish the course.

  • Focus on developing practical sense and skills

By providing lectures on corporate banking, various businesses, structure of the economy and likewise, the student is carved for their entrepreneur drive.

  • Career guidance

After completing the course, one may be confused whether to opt for a banking job or work with a manufacturing company or start his own business. S20 provides counseling laying down the pros and cons in each of them.

  • Learning made enjoyable for youngsters

The faculties try to make the lectures interactive and lively so that they don’t get bored. Also they are introduced with certain computer related skills.

  • Free demo

Don’t think much. Just go for a demo lecture before joining in. See if you are able to connect with the faculties’ way of teaching, and then decide to go for it or not.

New Noon Batch Starting From 29.08.2019

– Register now. New Noon Batch starting from August, 29th 2019 timing 1:30pm to 3:30pm. (Ideal for Tally Course, Accounting Course).…

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New Noon Batch for GST, Accounting, Tally, Taxation Courses in Ahmedabad

– Register now. New Noon Batch starting from August, 29th 2019 timing 1:30pm to 3:30pm.
(Ideal for Tally Course, Accounting Course). For more details visit / call S20.

– Hurry up. New Weekend Batch starting from September, 8th 2019 timing 8:00am to 11:00am
(Ideal for Accounting Training, Tally Training, GST Training, Taxation Training).

New Morning Batch Starting From 29.08.2019

– Register now. New Morning Batch starting from August, 29th 2019 timing 8:00am to…

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New Morning Batch For Accounting, Tally, GST, Taxation Courses in Ahmedabad

– Register now. New Morning Batch starting from August, 29th 2019 timing 8:00am to 10:00am
(Ideal for Tally Course, Accounting Course). For more details visit / call S20.

– Hurry up. New Noon Batch starting from August, 29th 2019 timing 1:30pm to 3:30pm
(Ideal for Accounting Training, Tally Training, Job-oriented Training).

Fundamentals of TDS

As most of us are aware, TDS actually stands for tax deduction at source.…

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As most of us are aware, TDS actually stands for tax deduction at source. While this is easily known to all, the concepts are not as easily understood, in fact dreaded at times too. As a subject, it is vast and you’ll need a good taxation course to become Mr./Ms. Know-it-all. Here, however, we have provided a brief outline so as to familiarize readers with the first principles.

TDS is not just an Indian tax concept. It is a global code applied everywhere in taxation. Internationally, it is usually referred to as withholding tax, i.e. tax withheld while making payments. 

The key reasons behind introduction/ existence/ levy of TDS are:

  • to provide an opportunity to the government to recover tax (or at least a part of it) upfront
  • to bring the transaction within tax ambit / network and ensuring that it gets reported eventually by the income recipient

Chapter XVII of the Indian income tax law (the Income Tax Act, 1961) deals with various provisions relating to TDS, such as:

  1. Authorizing deduction of tax at source from payments made (section 190)
  2. Specifying various types of payments to residents on which taxes have to be deducted, and rate of TDS, for example:
    • Tax on salaries to be fully deducted (section 192)
    • TDS on contractual payments @ 2% (section 194C)
    • TDS on professional payments @ 10% (section 194J), and so on.
  3. Providing the situation when taxes are required to be deducted from payments to non-residents (section 195 and others)
  4. Credit of TDS deducted by payer can be claimed by the payee against the tax liability determined on his total income (section 199)
  5. Duties of person deducting TDS, for example:
    • Requirement to obtain TAN (section 203A) and deposit TDS on time (section 200);
    • Payment of interest where TDS is not deducted on time, or after deducting is not deposited within the due date (section 201);
    • Obligation to file TDS returns (section 206) and issue TDS certificate to the payee (section 203);
    • Who is responsible for deducting tax – payer or principal officer of the company where the payer is a company (section 204); and so on.

    A lot of these sections in turn refer to Income Tax Rules where further details are provided, such as due dates, format of forms to be issued and return to be filed etc.

  6. Responsibility of payee to furnish his PAN, in absence of which payer may deduct tax at higher rate of 20% (section 206AA)
  7. Possibility of applying for a lower TDS certificate to the TDS officer where the applicable tax rate can cause hardship, for example, net income is lower, income recipient is in losses etc. (sections 195 and 197)
  8. Requirement to gross up income where TDS is to be borne by the payer (section 195A).

Hope you got a quick snapshot of TDS fundamentals from the above. For more detailed learning, you could subscribe to Super 20, a taxation coaching centre in Ahmedabad forming part of various commerce courses of varying levels – Jr. Executive, Executive, Advanced Executive.

TDS concepts may seem complex, but are very relevant for today’s business and taking up the best tax course for these would go a long way in staying tax-compliant, whether self or clients.