As per notification no.29/2018 issued on 31st Dec 2018, it was stated that few services which are usually taxed directly are now taxable under reverse charge mechanism they are :
1. Services provided by the business facilitator to Banking company
2.Services provided by an agent of business correspondent to the business correspondent.
3.Services provided by security agencies to the registered person
The above said notification will not be applicable to :
i) A Department or establishment of the central government or state government or union territory.
ii) Local authority.
iii) Governmental Agencies.
The notification will come into force from 1st January 2019. Both services receiver and provider should register under GST as per section 9(3) of Central Goods and Services Tax act 2017.
What is RCM
GST will be usually paid by the service provider but in some cases, the service recipient will pay GST on behalf of the service provider.
[Section 9(3): Both the parties registered under the GST act 2017
Section 9(4): Either of the parties registered under GST act 2017]