Reverse charge: Meaning and Definition

What does reverse charge mean?

Reverse charge is another name for Reverse Charge Mechanism (RCM). A GST provision where the recipient of goods or services is liable to pay the tax instead of the supplier.

The two names mean the same thing. You will see "reverse charge" in some ledgers, reports and contracts and "RCM" in others. The full entry covers how it works, with examples.

Read the full definition of Reverse Charge Mechanism (RCM)

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From the glossary

Related terms.

Input tax credit Reverse Charge Mechanism (RCM) A GST provision where the recipient of goods or services is liable to pay the tax instead of the supplier. Also called reverse charge, reverse charge under GST GST basics GST (Goods and Services Tax) India's unified indirect tax that replaced multiple central and state levies, creating a single national market for goods and services. Also called Goods & Services Tax Input tax credit Input Tax Credit (ITC) A mechanism that allows businesses to claim credit for GST paid on purchases and expenses, reducing their overall output tax liability. Also called input credit, GST input credit, input tax credit under GST GST returns GSTR-3B A monthly self-declared summary return where businesses report their GST liability, claim Input Tax Credit, and pay the net tax due. Also called Form GSTR-3B, GST summary return, monthly summary return GST basics Anti-Profiteering Anti-profiteering under GST requires businesses to pass on the benefit of tax rate reductions or increased ITC to consumers through proportionate price reductions. Also called anti-profiteering provisions, section 171 of the CGST Act Trade and foreign exchange Central Excise A tax on the manufacture of goods within India, levied by the central government and largely subsumed by GST in 2017. Also called central excise duty

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