GST Reverse Charge (RCM) Calculator
Compute reverse charge tax payable in electronic cash ledger and check Input Tax Credit (ITC) claim eligibility.
RCM Service / Goods Details
Cannot be offset using electronic credit ledger
RCM Liability & Settlement Schedule Table 3.1(d) GSTR-3B
- Self-Invoicing: Recipient must generate a self-invoice under Section 31(3)(f) when buying from unregistered suppliers.
- Electronic Cash Ledger Only: Output tax under RCM cannot be adjusted using credit ledger balances (Rule 85(4)).
- ITC Availability: Tax paid via cash ledger under RCM is available as Input Tax Credit in Table 4(A)(3) of GSTR-3B in the same tax period.
Complete Guide to Reverse Charge Mechanism (RCM) Under GST
Normally, the supplier of goods or services pays GST to the government after collecting it from the customer. However, under the Reverse Charge Mechanism (RCM) specified in Section 9(3) and Section 9(4) of the Central Goods and Services Tax (CGST) Act, the statutory liability to pay GST directly to the government shifts completely to the recipient of goods or services.
GTA Services RCM Rules
When utilizing Goods Transport Agency (GTA) freight services:
- 5% RCM (No ITC by GTA): Recipient pays 5% GST in cash and takes full 5% ITC.
- 12% Forward Charge: If GTA opts to pay under forward charge with ITC, RCM does not apply.
- No threshold exemption applies for single consignment or multi-consignment carriage.
Legal & Director Remuneration Rules
Key professional services requiring 100% RCM compliance:
- Advocate / Senior Advocate / Law Firms: 18% GST payable by business entity with aggregate turnover exceeding threshold.
- Director Sitting Fees & Remuneration: Services provided by director (other than whole-time salary under TDS 192) attracts 18% RCM.
- Security Services: Services provided by non-body corporate to registered persons attract 18% RCM.
Key Notified RCM Services Under Notification No. 13/2017-Central Tax (Rate)
| Category of Supply | Supplier Type | Recipient Type | GST Rate | Payment Mode |
|---|---|---|---|---|
| Goods Transport Agency (GTA) | Unregistered / Opted out GTA | Registered Business / Factory / Co-op | 5% | Cash Ledger Only |
| Legal Services | Individual Advocate or Firm | Any Business Entity | 18% | Cash Ledger Only |
| Director Remuneration | Company Director | Company or Body Corporate | 18% | Cash Ledger Only |
| Commercial Renting | Unregistered Landlord | Registered Business Entity | 18% | Cash Ledger Only |
Frequently Asked Questions on GST Reverse Charge
Can I use available ITC balance to pay RCM liability?
No. Under Section 49(4) of the CGST Act, Input Tax Credit in the electronic credit ledger can only be utilized for discharge of output tax on outward supplies. Tax liability under RCM must compulsorily be paid in cash through the Electronic Cash Ledger.
When can I claim Input Tax Credit on RCM tax paid?
You can claim 100% ITC in the very same month's GSTR-3B return (under Table 4(A)(3)) in which you pay the RCM cash tax, provided the underlying expense is used for business purposes and is not blocked under Section 17(5).
Is a self-invoice mandatory for RCM transactions?
Yes. Under Section 31(3)(f) of the CGST Act, when a registered recipient receives taxable goods or services from an unregistered supplier under RCM, the recipient must issue a self-invoice on the date of receipt and a payment voucher upon making payment.
Statutory Legal Framework & Compliance Guidelines (Gst Rcm Calculator)
In the Indian taxation ecosystem administered by the Central Board of Direct Taxes (CBDT) and the Goods and Services Tax Network (GSTN), strict compliance with statutory calculation rules is mandatory under the Central Goods and Services Tax (CGST) Act, 2017.
Taxpayers, chartered accountants, CFOs, and small business owners must ensure that every claim, deduction, tax rate calculation, and return reconciliation strictly matches the prescribed standard operating procedures. Miscalculations or delayed compliance lead to automated system notices, interest under statutory provisions, and potential disallowance of credits.
Step-by-Step Practical Calculation Guide
- Identify Taxable Base / Gross Turnover: Determine the exact gross receipts, gross salary, invoice turnover, or capital transaction value for the applicable financial year.
- Apply Eligible Exemptions & Thresholds: Deduct standard statutory exemptions, non-taxable allowances, threshold limits, or basic cost indexation where applicable.
- Compute Net Tax Liability: Calculate the applicable progressive tax slab or flat statutory rate, accounting for relevant cess (4% Health & Education Cess) or applicable surcharges.
- Reconcile with Portal Records: Cross-verify computed amounts with official government portal filings before submitting ITR or GST returns to prevent automated mismatch notices.
Top Compliance Mistakes to Avoid
- • Claiming Disallowed Items: Attempting to claim deductions or input credits barred under statutory provisions (such as blocked credits or expired time limits).
- • Ignoring Due Dates: Delaying payments beyond the 20th of the month or prescribed quarterly advance tax deadlines, which immediately triggers mandatory interest accruals.
- • Data Mismatches: Discrepancies between internal accounts, Form 26AS/AIS/TIS records, and GSTR-2B automated statements.
- • Incomplete Record Keeping: Failure to retain statutory invoices, payment proofs, and challan acknowledgments for the minimum statutory period of 6 to 8 years.
Direct Taxpayer Portal Access
Verify live taxpayer registration, return filing status, and challan receipts directly on official government servers.