GST Reverse Charge Calculator

Frequently Asked Questions (FAQ)

1. What is a GST Reverse Charge Calculator?

A GST Reverse Charge Calculator helps businesses calculate the GST liability under the reverse charge mechanism (RCM). It determines how much GST needs to be paid by the recipient instead of the supplier.

2. How does the Reverse Charge Mechanism (RCM) work?

In regular GST transactions, the supplier collects and pays GST. However, under reverse charge, the buyer is responsible for paying GST directly to the government instead of the seller.

3. How do I calculate GST under reverse charge?

To calculate GST under reverse charge:

• Enter the total amount including GST in the calculator.
• Select whether the goods/services are intra-state (CGST + SGST) or inter-state (IGST).
• Choose the applicable GST rate (0.25%, 3%, 5%, 12%, 18%, or 28%).
• The calculator will show GST amount, CGST, SGST, IGST, and the total amount excluding GST.

4. When is the reverse charge applicable in GST?

Reverse charge applies in the following cases:

• Purchase from an unregistered dealer: If a registered business buys from an unregistered supplier.
• Import of goods or services: The recipient must pay IGST under RCM.
• Notified supplies: Some services (like legal services, GTA services, etc.) fall under mandatory reverse charge.

5. Who is responsible for paying GST under reverse charge?

The recipient of the goods or services is responsible for calculating, paying, and filing GST under RCM. The supplier does not charge GST on the invoice.

6. How do I report reverse charge transactions in GST returns?

• Declare reverse charge liability in GSTR-3B under Table 3.1(d).
• Claim Input Tax Credit (ITC) in GSTR-2A (if applicable).
• Report details in GSTR-1 (if applicable) for documentation purposes.

7. What is the difference between Forward Charge and Reverse Charge in GST?

• Forward Charge: The supplier collects GST from the buyer and pays it to the government.
• Reverse Charge: The buyer pays GST directly to the government instead of the supplier.

8. Can I claim ITC (Input Tax Credit) on Reverse Charge GST?

Yes, businesses can claim ITC on GST paid under reverse charge, provided the goods or services are used for taxable supplies.

9. Does reverse charge apply to both CGST, SGST, and IGST?

• If the supply is within the same state, reverse charge applies to CGST + SGST.
• If the supply is from another state, reverse charge applies to IGST.

10. Where can I use this GST Reverse Charge Calculator?

This calculator is useful for:

• Business owners, accountants, and tax professionals
• Freelancers and service providers
• E-commerce sellers and importers
• Manufacturers and traders dealing with unregistered suppliers