CA Naveen Chand
(Chartered Accountant)
(12729 Points)
Replied 06 April 2018
Forward charge or direct charge is the mechanism where the supplier of goods/services is liable to pay tax.
For instance, if a chartered accountant provided a service to his client, the service tax will be payable by the chartered accountant.
Or for instance, if a car manufacturing company sold some auto parts to a trader and collected tax from the trader, the manufacturing company remits the tax.
Under the current tax system, most transactions are covered under the forward charge mechanism.
Pankaj Rawat
(GST Practitioner)
(55047 Points)
Replied 06 April 2018
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