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What is Reverse Charge Mechanism?

In the Forward Charge, the supplier of goods or services is responsible to pay tax to the government. However, under reverse charge mechanism the buyer or the recipient is liable to pay the tax to government. The main difference between Forward Charge and Reverse Charge is that the buyer of goods or services is responsible to pay tax to government instead of the supplier. Also, the tax under reverse charge mechanism is considered as non-refundable tax.

How is Reverse Charge Mechanism used in Kpi.com?

In Kpi.com, the only thing that you should do is to tick “Reverse Charge Applicable” in Financial Information of the supplier in Supplier Center.  All Purchase transactions related to this supplier will be recorded under reverse charge mechanism.