Example to Understand Reverse Charge

Let us assume that supply of cement will attract Reverse Charge. Now a supplier dispatched the goods on 1st August, received by the buyer on August 5, payment was made on 25th July (Advance Payment) and invoice raised by supplier on 1st August.
Time of Supply under reverse charge would be 25th July and must be included in the return for July period though the goods were received in August.

For Services

Nothing has been yet prescribed in GST. We should also look at the present reverse charge provisions under Service Tax, applicable on certain services.
For example, a manpower supplier XYZ Guard has provided services to a company ABC and charged bill of INR 1,00,000. Service tax liability is INR 1,00,000*15% = INR 15,000. Service provider XYZ Guard will send a bill of INR 1,00,000 mentioning at the bottom that the service tax will be borne by the receiver.
So ABC will pay 1,00,000 to XYZ Guard and deposit INR 15,000 to the Government.
While nothing has been yet prescribed, it is expected reverse charge mechanism for services under GST will follow the same procedure.

For Goods

For the first time under GST, reverse charge is applicable on goods.
For example, unregistered dealer sells for INR 100. Buyer will deduct GST of say 5% = INR 5 and deposit it under reverse charge. So now, will seller receive INR 100 or INR 95? Now if we look at the present VAT laws, some states treat purchases from unregistered dealers as 0% transaction, i.e, VAT is not applied. For other states such as Karnataka, purchase tax is applicable on all purchases made by a registered dealer from an unregistered dealer, irrespective of the purpose for which such goods are purchased. Further, such tax paid by a registered dealer will be available as input tax credit, subject to certain conditions as per Karnataka VAT Act.

Nothing has been yet prescribed for reverse charge mechanism for goods under GST. It is expected that it will follow the same treatment as reverse charge mechanism for services above.
So, by the above treatment, the seller will receive INR100. The buyer will deposit rs. 5 with the government on his own.