How-to · GST
GST reverse charge: who pays, which services are notified, and why registration is not optional
Section 9(3) of the CGST Act shifts tax on notified supplies to the recipient, who is then treated as the person liable to pay. The notified service list covers goods transport, legal services, arbitral tribunals, sponsorship, directors, insurance and recovery agents, security services and more.
In this guide
Reverse charge means the recipient pays the tax instead of the supplier. Section 9(3) of the CGST Act lets the Government notify categories of supply on which the recipient pays, and says every provision of the Act then applies to that recipient as if they were the person liable to pay. Notification 13/2017 carries the notified service list. A person liable under reverse charge must register regardless of turnover.
What reverse charge does
Ordinarily the supplier collects tax and pays it. Reverse charge inverts that. Under section 9(3), the Government may notify categories of supply on which tax is paid by the recipient, and the section then states that all provisions of the Act apply to that recipient as if they were the person liable for paying the tax on that supply.
That last clause is the one people underestimate. It does not merely move a payment. It moves the whole machinery: liability, the duty to register, the return, the record. The recipient is not doing the supplier a favour, they are the taxable person for that supply.
Section 9(4) is a separate power. It lets the Government notify a class of registered persons who must pay tax on reverse charge for specified categories received from an unregistered supplier. It is narrower than the pre-2019 version, which applied broadly to supplies from any unregistered supplier to a registered person.
The notified services and who pays
Notification 13/2017-Central Tax (Rate) is the service list. Each entry names the service, the supplier, and the recipient who must pay. The recurring entries for an ordinary business:
| Service | Supplier | Recipient who pays |
|---|---|---|
| Road transport of goods | Goods transport agency | Factory, registered society, co-operative society, registered person, body corporate, partnership firm or casual taxable person in the taxable territory |
| Legal services, directly or indirectly | Individual advocate including a senior advocate, or a firm of advocates | Any business entity in the taxable territory |
| Services of an arbitral tribunal | Arbitral tribunal | Any business entity in the taxable territory |
| Sponsorship | Any person | Body corporate or partnership firm in the taxable territory |
| Director's services to the company | Director of a company or body corporate | That company or body corporate |
| Insurance agent services | Insurance agent | Person carrying on insurance business |
| Recovery agent services | Recovery agent | Banking company, financial institution or non-banking financial company |
| Transfer or permitted use of copyright in original literary, dramatic, musical or artistic work | Author, music composer, photographer, artist or the like | Publisher, music company, producer or the like |
| Supply of security personnel | Any person other than a body corporate | A registered person in the taxable territory |
Government services form their own group. An entry covers services by the Central Government, a State Government, a Union territory or a local authority to a business entity, with named exclusions, and a separate entry covers renting of immovable property by those suppliers to a registered person.
The list has been amended repeatedly, and entries carry provisos that exclude particular recipients. The security-services entry, for instance, does not apply to a composition taxpayer. Read the entry, including its proviso, rather than the row heading.
Registration is not optional
Section 24 overrides the turnover threshold for a person required to pay tax under reverse charge. A small entity with no other reason to register still registers once a notified supply is received.
That interacts badly with the registration threshold assumptions people carry. A firm under ₹20 lakh that takes a goods transport agency service or an advocate's invoice is not outside the net.
Paying it, then claiming credit
Reverse-charge tax is paid in cash. It is not set off against available input tax credit, because the liability arises as a recipient rather than as an output tax of the business. Once paid and otherwise eligible, it becomes credit in the ordinary way.
- Identify the notified supply when the invoice arrives, not at year end.
- Discharge the liability in cash in the relevant period's return.
- Claim the credit only if the supply is not otherwise blocked. See blocked credits.
- Keep the self-invoice and payment record. The recipient is the person liable, so the documentation sits with them.
A missed reverse-charge liability shows up as a cash-payment shortfall, which is where interest under section 50 attaches.
How to confirm on official pages
- Read section 9 on CBIC for sub-sections (3) and (4), and note that (4) was substituted.
- Read the entry that matches your invoice in Notification 13/2017, including the explanations at the end that define recipient for freight and legal services.
- Check the notification listing on the GST Council site for later amendments before you rely on a consolidated copy.
Where Complied AI fits
Section 9(3) is stable. The notified list is not, and entries have been added and narrowed several times. CBIC and GST updates on Complied AI keep the amending notifications beside section 9, so a reverse-charge call is made against the current list rather than a saved PDF.
Practical checks
Common questions
What does section 9(3) of the CGST Act actually say?
It lets the Government, on the Council's recommendations, notify categories of supply of goods or services on which tax is paid on reverse charge basis by the recipient, and provides that all provisions of the Act apply to that recipient as if they were the person liable for paying the tax on that supply.
Is a company paying an advocate liable under reverse charge?
Notification 13/2017 covers legal services supplied directly or indirectly by an individual advocate, including a senior advocate, or by a firm of advocates, where the recipient is a business entity located in the taxable territory. The notification's explanation defines legal service to include representational services before a court, tribunal or authority.
Does a director's remuneration attract reverse charge?
Notification 13/2017 lists services supplied by a director of a company or body corporate to that company or body corporate, with the company as the recipient liable to pay. Whether a particular payment is a director's service or salary is the prior question and decides whether the entry applies at all.
Can I stay unregistered if my only exposure is reverse charge?
No. Section 24 requires registration for a person required to pay tax under reverse charge, notwithstanding the turnover threshold in section 22(1). The liability itself triggers the registration duty.
Publication method
How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 20 August 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
Verification path
Official sources used
Keep reading
Related guides
- How-to · GSTGST place of supply of services: the default rule, and the ten exceptions that override itSection 12 of the IGST Act sets the place of supply for services when supplier and recipient are both in India, and section 13 when one of them is outside. The default turns on the recipient's registration status, and sub-sections (3) onwards override it for property, events, transport, telecom, banking and more.
- How-to · GSTQRMP scheme: quarterly returns, monthly payment, and the 13th of the month you cannot missHow the Quarterly Return Monthly Payment scheme works on the GST portal: the ₹5 crore turnover test, the opt-in window for each quarter, the fixed sum and self-assessment challan methods in PMT-06, and the Invoice Furnishing Facility cut-off.
- How-to · GSTGST composition scheme: the rate ceilings, the six conditions, and the day the option lapsesSection 10 of the CGST Act sets composition rate ceilings of 1, 2.5 and 0.5 per cent, a separate 3 per cent option for others, six eligibility conditions, a same-PAN rule, and a lapse that takes effect the day turnover crosses the limit.