Reverse Charge Calculator
Under the Reverse Charge Mechanism (RCM), the recipient of the goods/services is liable to pay the GST instead of the supplier. Use our tool to calculate your RCM liability instantly.
Calculation Result
Tax Breakdown
Net Amount
₹0
GST (18%)
+₹0
CGST (9%)
₹0
SGST (9%)
₹0
Tax Insight
Standard service rate. ITC is fully available on business-to-business (B2B) purchases.
Total Amount
Rupees Only
Informational tool only. All calculations follow Section 170 rounding rules of the CGST Act. Cross-verify with a tax professional before filing.
Comprehensive Guide to Reverse Charge Mechanism (RCM)
Normally, the supplier of goods or services is responsible for collecting tax from the customer and paying it to the government. However, under the Reverse Charge Mechanism (RCM), the legal liability to pay tax is reversed—the recipient of goods or services must pay the GST directly to the government.
Critical Scenarios for RCM Applicability
The GST Council has notified specific categories where RCM is mandatory to ensure tax compliance in unorganized sectors:
- Supplies from Unregistered Dealers: If a registered business purchases goods or services from an unregistered person (Section 9(4) of the CGST Act).
- Notified Services (Section 9(3)): Specific services like Goods Transport Agency (GTA), legal services by an advocate, sponsorship services, and services provided by the government to business entities.
- Import of Services: Any service imported into India for a consideration is treated as a supply under RCM.
- E-commerce Operators: In certain cases like housekeeping or passenger transport, the e-commerce operator is liable to pay tax under RCM.
Important Compliance Note
Tax under RCM must be paid in cash only using the Electronic Cash Ledger. You cannot use Input Tax Credit (ITC) to pay the RCM liability. However, once paid, you can claim ITC on the amount paid under RCM in the same month.
Frequently Asked Questions (FAQs)
1. Who is responsible for raising the invoice in RCM?
Under RCM, the recipient of the supply is responsible for issuing a "Self-Invoice" and a payment voucher at the time of making the payment to the supplier.
2. Is RCM applicable on inter-state purchases?
Yes, if the supply falls under the notified RCM category, IGST must be paid by the recipient even if the transaction is inter-state.
3. What is the time of supply under RCM?
For goods, it is the earliest of: Date of receipt of goods, Date of payment, or 30 days from the date of invoice. For services, it is the earlier of: Date of payment or 60 days from the date of invoice.
4. Can a composite dealer pay tax under RCM?
Yes, a dealer under the Composition Scheme is also required to pay tax at normal rates (not composition rates) if they receive supplies that fall under RCM.