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Mechanism Checker
RCM Applicability · All Notified Services & Goods
Instantly check if Reverse Charge Mechanism (RCM) applies to your transaction. 50+ notified services and goods — GTA transport, advocate fees, director services, security, import of services, renting, metal scrap, real estate and more. Updated for 2026 — includes Jan 2025 and Oct 2024 notifications.
Does My Transaction Attract Reverse Charge? — Search & Check
Search by service/goods name, supplier type, or section. Each entry shows RCM status, applicable GST rate, who pays, ITC eligibility, and whether a self-invoice is required.
🔍 RCM Applicability Checker — Section 9(3) / 9(4) / 9(5) CGST Act
Updated to Notification 13/2017-CT(R) as amended · Oct 2024 + Jan 2025 notifications included
| Section | Service / Goods | Category | Supplier | Recipient | RCM Status | GST Rate | Self-Invoice? | ITC Available? | Key Condition |
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⚠️ Always verify against the latest CBIC notifications before filing. RCM list is subject to periodic updates. TAXAJ CA team for exact RCM advice.
How Reverse Charge Mechanism Works — Step by Step
In RCM, the buyer pays GST directly to the government — not to the supplier. The supplier receives payment without GST (or at reduced rate). The registered recipient computes, pays, and reports RCM tax in GSTR-3B, then claims ITC on the same payment.
Identify RCM Supply
Check if the service/goods is in the Sec 9(3) or 9(4) notified list
Supplier Issues Invoice
Supplier issues invoice without GST. Marks "Tax payable on RCM basis" if registered.
Recipient Issues Self-Invoice
If supplier is unregistered, recipient issues self-invoice with RCM tax under Rule 36(1)(b)
Pay RCM in Cash
Pay GST in Electronic Cash Ledger — ITC cannot be used to pay RCM. Report in GSTR-3B Table 3.1(d)
Claim ITC (if eligible)
Claim ITC on RCM paid in the same GSTR-3B, subject to Sec 17(5) blocked credit rules
⚠️ 3 Critical RCM Rules Every Business Must Know
Reverse Charge Mechanism — Key Concepts Explained
Section 9(3) — Notified Supplies
The government specifically notifies categories of goods and services where RCM always applies — regardless of whether the supplier is registered or unregistered. Examples: GTA freight, advocate fees, director services, security services, import of services. Governed by Notification 13/2017-Central Tax (Rate) for services and Notification 04/2017 for goods.
Section 9(4) — Unregistered Suppliers
Applies when a registered buyer purchases from an unregistered supplier — but only for specific notified goods/services. Currently limited mainly to real estate sector (cement from URD), metal scrap (from Oct 2024), raw cotton, tobacco leaves. The earlier blanket 9(4) rule (all URD purchases) was suspended in 2018 and never reinstated in full.
Section 9(5) — E-Commerce Operator
The e-commerce operator pays GST instead of the individual supplier — covers cab services (Ola/Uber), accommodation (MakeMyTrip/OYO), housekeeping/cleaning services. Not technically "reverse charge" but similar principle — the platform operator is the deemed supplier. Does not require self-invoice from the individual service provider.
Import of Services — IGST on RCM
When an Indian registered business imports services from a foreign supplier (SaaS subscription, consulting, cloud services, software licenses), IGST is payable under RCM by the Indian recipient under Section 5(3) of the IGST Act. The foreign supplier has no GST registration obligation. Even related party imports without payment (parent company services to subsidiary) attract RCM on open-market value.
ITC on RCM — Same Period Claim
After paying RCM in cash, the recipient can claim ITC in the same GSTR-3B period — making RCM largely tax-neutral for regular businesses. But ITC is blocked for: personal/non-business use, Sec 17(5) blocked items (motor vehicles for personal use, food, club membership), and composition dealers cannot claim ITC at all — it's a pure cost for them.
Real Estate Sec 9(4) — 80% Rule
Real estate developers/promoters must procure minimum 80% of inputs from GST-registered suppliers. If shortfall below 80%, developer pays RCM at 18% on the shortfall amount. Cement from any unregistered supplier attracts RCM at 28% regardless of 80% threshold. Capital goods from unregistered suppliers also attract RCM at applicable rate.
✅ Monthly RCM Compliance Checklist — Before Filing GSTR-3B
- ✓GTA Bills: Check all freight invoices — if GTA hasn't opted for forward charge at 12%, pay 5% RCM on the freight amount. Issue payment voucher to GTA.
- ✓Legal/Advocate Fees: All payments to individual advocates, senior advocates, or law firms for legal services to your business entity — pay 18% RCM. Issue self-invoice if advocate is unregistered.
- ✓Director Services: Non-executive director sitting fees, commission, and service charges — pay 18% RCM. Issue self-invoice. Note: Executive director salary is not RCM (it's employment income, not supply).
- ✓Security Services: If your security agency is a non-corporate entity (proprietorship, partnership) — pay 18% RCM. If it's a company or body corporate, no RCM — forward charge applies.
- ✓Commercial Rent from URD: If your office/shop/warehouse is rented from an unregistered landlord — pay 18% RCM on rent (from Oct 10, 2024). Issue self-invoice. This is a new compliance requirement many businesses are missing.
- ✓Foreign Software/SaaS/Consulting: Any import of services — cloud subscriptions (AWS, Azure, Salesforce), foreign consulting fees — pay IGST at applicable rate under RCM. File in GSTR-3B Table 3.1(d).
- ✓Insurance Agent Services: If you are an insurance company and you pay commission to an individual agent — pay 18% RCM. Body corporate agents: forward charge.
- ✓Motor Vehicle Renting: If you rent a passenger motor vehicle (seating ≤13 persons, not bus) from an unregistered person or a registered non-body-corporate — pay 5% RCM (or 12% with ITC option).
- ✓Report in GSTR-3B Table 3.1(d): Declare all RCM tax payable in Table 3.1(d). Claim eligible ITC in Table 4. Pay RCM in cash ledger before filing. Cannot offset against ITC balance.
- ✓GSTR-1 Self-Invoice Reporting: Self-invoices issued for URD purchases under 9(4) must be reported in GSTR-1 Table 4B. Sec 9(3) RCM from registered suppliers: only GSTR-3B reporting required.
GST Reverse Charge Mechanism India — Complete 2026 Guide
The Reverse Charge Mechanism (RCM) under GST is a provision where the recipient of goods or services pays GST directly to the government instead of the supplier. Defined under Section 9(3) and 9(4) of the CGST Act, 2017 (and Sections 5(3) and 5(4) of the IGST Act for inter-state transactions), RCM applies to two broad categories: (1) Section 9(3) — Specific notified categories (GTA services, legal/advocate fees, director services, insurance agent, security services from non-corporates, renting of motor vehicles, copyright transfers, recovery agent, sponsorship in specified cases, and import of services), where RCM applies regardless of supplier registration; and (2) Section 9(4) — Purchases from unregistered suppliers, currently applicable mainly in real estate (80% registered procurement rule for promoters), metal scrap, raw cotton, tobacco leaves.
Key 2024–25 updates: Renting of commercial immovable property from an unregistered landlord was brought under RCM from October 10, 2024 — a major new compliance requirement for businesses renting from individual landlords. Metal scrap purchased from unregistered persons was added to the RCM list from October 2024 (Notification 06/2024-CT(R)). Sponsorship services were removed from RCM and moved to forward charge from January 16, 2025 (Notification 07/2025-CT(R)) — sponsors now receive a GST-charged invoice from the event organiser instead of paying RCM. The ISD (Input Service Distributor) mechanism for distributing RCM credit was clarified in February 2025. For businesses, RCM compliance requires: identifying all RCM transactions monthly, paying in cash (not ITC), issuing self-invoices for unregistered supplier purchases, reporting in GSTR-3B Table 3.1(d), and claiming ITC after payment. Missed RCM attracts 18% p.a. interest and ITC may be permanently lost if discovered in audit. TAXAJ's CA team conducts RCM reviews, clears historical arrears, and handles GST notices arising from RCM non-compliance.
GST Reverse Charge — Most Asked Questions
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