Reverse Charge Calculator
Calculate GST under Reverse Charge Mechanism (RCM). Find your RCM liability, ITC eligibility, and net tax payable for unregistered supplier purchases and notified services.
Reverse Charge Mechanism (RCM) Calculator
Compute RCM liability, ITC benefit and net cash outflow
RCM liability arises on notified goods/services or unregistered purchases. Consult CA for applicability.
Under RCM, if you buy from an unregistered supplier above Rs 5,000 per day, you pay GST directly to the government — not the supplier. The good news: you can claim this as ITC (if used for business), making the net cash outflow zero for most GST-registered businesses.
Reverse Charge Mechanism (RCM) in GST — Explained
Under the Reverse Charge Mechanism (RCM), the GST liability shifts from the supplier to the recipient. This applies to purchases from unregistered dealers (for specific goods/services), notified services such as Goods Transport Agency (GTA), legal services from advocates, and import of services. The buyer must self-assess and pay the GST directly to the government.
RCM vs normal charge — key differences
In a normal GST transaction, the supplier collects GST and deposits it. Under RCM, the supplier does not charge GST — the buyer pays it directly. However, registered businesses can claim Input Tax Credit (ITC) on RCM GST paid, making the net effective cost zero for most B2B transactions. The ITC, however, cannot be claimed in advance — payment must first be made.