Also called reverse charge mechanism, RCM, GST under reverse charge
Normally the seller collects GST and pays it to the government. Under reverse charge, the buyer pays it directly instead. It applies to specific notified goods and services, such as freight from a goods transport agency in many cases, or legal services from an advocate to a business.
Shops often miss reverse charge because no GST appears on the bill they receive. The tax must be paid in cash, not out of input tax credit, and reported in GSTR-3B. If the purchase is used for the business, you can then usually claim that tax back as input tax credit.
A wholesaler pays a goods transport agency ₹10,000 for freight, where the transporter charges 5% under reverse charge. The wholesaler pays ₹500 of GST itself and reports it in GSTR-3B, then claims the ₹500 as input tax credit in the same period.