Question
My accountant mentioned I have to pay GST under reverse charge on some expenses. What does that mean?
Answer
Under the reverse charge mechanism, the recipient of goods or services pays GST directly to the government instead of the supplier collecting it. It applies to certain notified supplies, such as legal services from an advocate, goods transport agency (freight) services, and some purchases from unregistered suppliers. Anyone liable under RCM must register for GST even if below the threshold. The tax must be paid in cash and cannot be set off using ITC; if the supplier is unregistered, you issue a self-invoice. Once you pay the RCM tax, you can usually claim it back as ITC, subject to the normal conditions.
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