Is a reverse charge under the GST applicable for sales/business promotion?
As per provisions of GST laws, reverse charge mechanism is applicable for every registered dealer.
So if this business promotion business is registered then it is applicable as well.
Reverse charge is payable by the buyer when the merchandise/services are purchased from an unregistered entity or an entity registered under the composition scheme.
Here the business promotion may be classified as merchandise and if the seller is registered, then charge GST if both are in the same state. If the seller is of another state – the charge IGST.
The assumption, the buyer is registered with GSTN.
- The merchandise are taxable items,
- The value is above business is above 20 lacs.
- This is a skeleton, Finer points may be sought from GST experts presumable against consulting fees.