Reverse Charge Mechanism Checker
Identify whether RCM applies to a specific transaction or supplier.
Under Reverse Charge Mechanism (RCM), the recipient pays GST directly to the government instead of the supplier. This tool helps identify common RCM categories. Use the search to find a specific service or supplier type.
| Type | Category | Applicability Note |
|---|---|---|
| Services | Goods Transport Agency (GTA) services | RCM applies if recipient is body corporate, partnership, registered person etc. GTA may opt for forward charge @12% with ITC. |
| Services | Legal services from advocate / firm of advocates | RCM applies if recipient is any business entity. Senior advocates also covered. |
| Services | Services by an arbitral tribunal | RCM if recipient is any business entity located in taxable territory. |
| Services | Sponsorship services to body corporate / partnership | Recipient pays GST under RCM. |
| Services | Services by Government or local authority | Generally under RCM (with specified exclusions like postal, transport, etc.). |
| Services | Director services to a company | RCM on services in capacity as director (not employee). |
| Services | Insurance agent services to insurance company | Insurance company pays under RCM. |
| Services | Recovery agent services to bank / NBFC | Bank / NBFC pays under RCM. |
| Services | Services from author / music composer / photographer | RCM on transfer of copyright in literary, dramatic, musical, artistic works. |
| Services | Renting of motor vehicle to body corporate | RCM if supplier (other than body corporate) charges 5% GST. |
| Services | Services from a person located in non-taxable territory | Import of services - RCM applies to the recipient. |
| Services | Security services (manpower) to registered person | RCM applies if supplier is not a body corporate. |
| Goods | Cashew nuts (not shelled / peeled) - from agriculturist | RCM on procurement from agriculturist. |
| Goods | Tobacco leaves - from agriculturist | RCM applicable. |
| Goods | Silk yarn from manufacturer | RCM applicable. |
| Goods | Raw cotton from agriculturist | RCM on procurement from agriculturist (notified). |
| Goods | Used vehicles, seized / confiscated goods from Govt | RCM applicable. |
| Goods | Lottery tickets supplied by state / Lottery distributor | RCM applies. |
Key RCM rules
- Time of supply: Earliest of (a) date of payment, or (b) 60 days from supplier’s invoice date.
- Tax payment: RCM is always paid in cash through Electronic Cash Ledger. Cannot use ITC to discharge RCM liability.
- ITC of RCM: Once paid, RCM amount can be claimed as ITC in the same return (if otherwise eligible).
- Self-invoice: Recipient must issue a self-invoice for RCM transactions where supplier is unregistered.
- Section 9(4): RCM on supplies from unregistered persons applies only to notified categories (currently mainly real-estate sector).
Important note: This tool provides an indicative output only. It does not factor in every special provision, surcharge, exception, or recent notification. Verify with the firm before acting on any computation.
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