Reverse Charge (RCM) GST Calculator — Section 9(3) & 9(4)
Under Reverse Charge Mechanism (RCM), the recipient pays GST instead of the supplier for notified goods and services. This calculator computes your RCM liability with CGST/SGST/IGST split, shows ITC eligibility, GSTR-3B reporting tables, and self-invoice requirements. Covers GTA, legal, security, director fees, imports, unregistered purchases, and more. GST must be paid in cash first — ITC is claimable in the same period if used for business.
Calculate RCM Liability
How to Use the Reverse Charge Calculator
This free tool calculates your GST liability under the Reverse Charge Mechanism with full CGST/SGST/IGST breakup, ITC guidance, and GSTR-3B reporting instructions.
Step 1 — Select RCM Scenario
Choose the type of supply attracting reverse charge. Each scenario has a default GST rate based on CBIC notifications. GTA services default to 5%, legal and security to 18%, imports to IGST only, etc.
Step 2 — Choose Supply Type
Select Intra-State (CGST + SGST) for supplies within your state, or Inter-State (IGST) for supplies from another state or imports. Import of services always uses IGST regardless of location.
Step 3 — Enter Amount and Rate
Enter the taxable value (before GST) and confirm the GST rate. The rate auto-adjusts based on scenario but can be overridden for custom situations.
Step 4 — View Results
Get instant results showing total RCM liability, CGST/SGST/IGST split, net cost impact (considering ITC), GSTR-3B table references, and self-invoice requirements.
CA Tip: RCM tax must be paid in cash through the electronic cash ledger — you cannot use ITC balance to pay RCM liability. However, once paid, the ITC can be claimed in the same period. This creates a temporary cash flow impact. Plan your working capital accordingly, especially for high-value GTA or import transactions. The ICAI recommends maintaining a separate RCM register.
What Is Reverse Charge Mechanism (RCM) Under GST?
Under normal GST, the supplier charges and remits tax to the government. Under Reverse Charge Mechanism, this liability shifts to the recipient. RCM was introduced under Section 9(3), 9(4), and 9(5) of the CGST Act to ensure tax compliance in sectors where suppliers are often unorganised, unregistered, or outside India.
The mechanism operates through three distinct provisions. Section 9(3) covers notified goods and services where RCM is mandatory regardless of the supplier’s registration status — these include GTA, legal, security, director services, and more. Section 9(4) covers purchases from unregistered dealers by registered persons, currently restricted to the real estate sector. Section 9(5) makes e-commerce operators liable for specified services like cab rides and accommodation.
A critical aspect of RCM is that GST must be paid in cash — not through Input Tax Credit. The recipient pays from the electronic cash ledger, and can then claim ITC on this payment in the same tax period (provided the supply is for business use and not blocked under Section 17(5)). This creates a cash-neutral position for eligible businesses but requires upfront cash availability.
Mandatory GST Registration for RCM
Under Section 24 of the CGST Act, any person liable to pay tax under RCM must register under GST regardless of their turnover. This is a compulsory registration requirement — even if turnover is below ₹20 lakh (or ₹40 lakh for goods).
Goods and Services Under RCM — Complete List
The GST Council and CBIC have notified specific categories of goods and services where RCM applies. This list is updated periodically via notifications.
Services Under Section 9(3)
| Service | Supplier | Recipient (Liable) | Typical Rate |
|---|---|---|---|
| Goods Transport Agency (GTA) | GTA | Factory, society, registered person, body corporate | 5% (no ITC) / 12% (with ITC) |
| Legal / Advocate services | Individual advocate / firm | Any business entity | 18% |
| Security services | Individual / proprietorship / partnership | Registered person | 18% |
| Director services (non-employee) | Director | Company / body corporate | 18% |
| Insurance agent services | Individual agent | Insurance company | 18% |
| Recovery agent services | Recovery agent | Banking / NBFC | 18% |
| Renting of residential property | Any person | Registered person (business use) | 18% |
| Import of services | Foreign supplier | Indian recipient | IGST at applicable rate |
2025 Update: Sponsorship services have been removed from RCM vide Notification No. 07/2025-Central Tax (Rate). Sponsors no longer pay GST under reverse charge — the service provider now pays under forward charge. Always verify the latest CBIC notifications for current RCM applicability.
RCM Compliance — Self-Invoice, Payment, and Filing
Self-Invoice Requirement
When purchasing from an unregistered supplier, the recipient must issue a self-invoice within 30 days of supply receipt. This self-invoice acts as the tax document for ITC claims and must include supplier details, taxable value, GST rate, GST amount, and the recipient’s own GSTIN. A payment voucher must also be issued at the time of payment.
GSTR-3B Reporting
RCM liability is reported in Table 3.1(d) of GSTR-3B under “Inward supplies liable to reverse charge.” The corresponding ITC is claimed in Table 4A. Both must be reported in the same filing period. The RCM tax amount flows to the electronic cash ledger for payment.
Time of Supply Rules
For goods under RCM: earliest of date of receipt, date of payment, or 30 days from invoice. For services under RCM: earlier of date of payment or 60 days from invoice. Understanding these timelines is critical for accurate reporting and avoiding interest charges.
Expert Tip: Maintain a dedicated RCM register tracking all reverse charge transactions with supplier details, invoice/self-invoice numbers, amounts, tax paid dates, and ITC claimed dates. This register is invaluable during GST audits and for preparing GSTR-9. Talk to our CA team →
Need help with RCM compliance? Our CAs handle reverse charge calculations, self-invoicing, GSTR-3B filing, and GST audit support for businesses across India. Talk to a CA today →
