What is Reverse Charge Mechanism (RCM) in GST?

Under RCM, the recipient of goods or services is liable to pay GST instead of the supplier. RCM applies to: (1) purchases from unregistered dealers (Section 9(4)), (2) specified services like legal services from advocates, GTA services, import of services, and others listed in Notification 13/2017.

Can I claim ITC on RCM tax paid?

Yes. GST paid under RCM is eligible for ITC in the same month, subject to the condition that the tax is actually paid in cash (not from ITC balance). This creates a cash flow impact — you pay RCM tax in cash and claim it back as ITC.

What happens if I miss RCM liability?

Undetected RCM liability results in short payment of tax, attracting demand under Section 73/74, interest at 18% per annum, and penalty. The GST department specifically checks RCM compliance during audits.

Which services attract RCM?

Key RCM services: legal services from advocates, GTA (goods transport agency) services, sponsorship services, services from directors to companies, import of services, security services, and renting of motor vehicles. The full list is in Notification 13/2017-CT(Rate).

What is Reverse Charge Mechanism (RCM) in GST?

Under RCM, the recipient of goods or services is liable to pay GST instead of the supplier. RCM applies to: (1) purchases from unregistered dealers (Section 9(4)), (2) specified services like legal services from advocates, GTA services, import of services, and others listed in Notification 13/2017.

Can I claim ITC on RCM tax paid?

Yes. GST paid under RCM is eligible for ITC in the same month, subject to the condition that the tax is actually paid in cash (not from ITC balance). This creates a cash flow impact — you pay RCM tax in cash and claim it back as ITC.

What happens if I miss RCM liability?

Undetected RCM liability results in short payment of tax, attracting demand under Section 73/74, interest at 18% per annum, and penalty. The GST department specifically checks RCM compliance during audits.

Which services attract RCM?

Key RCM services: legal services from advocates, GTA (goods transport agency) services, sponsorship services, services from directors to companies, import of services, security services, and renting of motor vehicles. The full list is in Notification 13/2017-CT(Rate).

Ledgr

GST RCM Tool

RCM Reconciliation — Reverse Charge Mechanism

Scan your purchase register for RCM-applicable transactions. Calculate total RCM liability and eligible ITC to ensure correct GSTR-3B Table 3.1(d) reporting.

Ledgr Tool

This tool is available inside Ledgr. Free plan included — no credit card required.

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What You Upload

Purchase register in Excel or CSV
Supplier GSTIN list (to identify unregistered dealers)
Tax period

What You Get

RCM-applicable transactions identified
RCM tax liability by category (Section 9(4) vs Notification 13/2017)
Total RCM payable in cash
Eligible ITC on RCM (claimable in same month)
GSTR-3B Table 3.1(d) and Table 4(A)(3) figures
Downloadable RCM register

How It Works

Upload purchase register

Upload your purchase register with supplier GSTIN, invoice details, and amounts.

Auto-classify

The tool identifies unregistered dealers and RCM-notified services.

Calculate liability

RCM tax is calculated at applicable rates for each category.

File GSTR-3B

Use the output to fill GSTR-3B Table 3.1(d) accurately.

Free to use

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Free plan available. Upload your files, get instant reconciliation results. No credit card required.

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Frequently Asked Questions

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