Reverse GST calculator

Applicability: Reverse GST typically applies in specific scenarios, such as when dealing with unregistered dealers or in certain transactions involving goods or services specified under the law.

Recipient’s Liability: Under Reverse GST, the recipient becomes liable to pay the tax directly to the government instead of the supplier. This shifts the responsibility of tax payment and compliance onto the recipient.

Input Tax Credit (ITC): The recipient who pays reverse GST is eligible to claim input tax credit for the tax paid on their purchases. This ensures that the tax burden is not duplicated along the supply chain.

Compliance Requirements: Recipients paying reverse GST must fulfill certain compliance requirements, such as filing appropriate returns and maintaining records as mandated by the tax authorities.

Legal Framework: Reverse GST provisions are usually specified under the GST laws of a country or region. These laws define the circumstances under which reverse charge mechanism applies and the procedures to be followed for compliance.

Impact on Businesses: Reverse GST can have implications for businesses, particularly in terms of cash flow and compliance costs. Recipients may need to manage their finances efficiently to accommodate the direct tax payment obligations.

Anti-Tax Evasion Measure: Reverse GST serves as an anti-tax evasion measure by ensuring that tax liabilities are not evaded by unscrupulous suppliers who may underreport their sales or evade tax altogether.

Government Revenue: Implementing reverse GST can enhance tax collection efficiency for the government by broadening the tax base and reducing opportunities for tax evasion.