Reverse Charge Mechanism (RCM) in GST

Normally the supplier pays GST. Under Reverse Charge, the recipient pays it.

When RCM Applies

• Unregistered supplier – You buy from unregistered; you pay GST
• Specific goods/services – CBIC notifies (e.g. some imported services, goods from unregistered)
• GTA (Goods Transport Agency) – Recipient may pay under RCM

How It Works

1. You receive invoice without GST (or with “Reverse charge”)
2. You pay GST in your GSTR-3B under “Reverse charge”
3. You can claim ITC on that RCM tax if it’s for business

For Shop Owners

If you buy from unregistered wholesalers or small vendors, you may need to pay RCM. Add it to your cost and/or pass to customer if applicable.

Stockkeeper helps track purchases. Ensure RCM invoices are recorded for correct returns. Join the waitlist.