Person and Taxable Person

A taxable person is liable to pay tax under GST.

A person is registered or is liable to be registered under the law would be a taxable person in GST. A person would be liable to be registered under the law under two categories:

1. a) Person liable to be registered mandatorily.
2. b) Person liable to be registered provided aggregate turnover of supply of goods or services or both exceeds threshold limit.

  Generally, a person is liable to pay tax on the supply of goods or services made by him. Whether in any case, a person is liable to pay tax on these supplies received by him?

The tax is generally paid by the person on the supply of goods or services made by him. This is called Forward charge of Tax.

Case Study: A is a Chartered Accountant. He provides consultancy on a taxation matter to B. A is liable to get registered and pay tax on the supply of services made by him to B subject to fulfillment of conditions as prescribed under the law.

In some of the cases, a person is liable to pay tax on the goods or services received by him. The law casts the responsibility to pay tax on the person receiving the supply of goods or services rather than the person supplying the goods or services. This is called Reverse charge of tax.

Case Study:  A is a Chartered Accountant. He provides consultancy on a taxation matter to B. Here, Law provides that B is liable to get registered and pay tax on the supply of services received by him from A. This is reverse charge wherein recipient is liable to pay tax.