Reverse Charge (RCM) Calculator
Pay, Claim & File Correctly. Calculate GST liability for GTA, Advocates, and Security.(Warning: You must pay this in Cash before you can claim it)
RCM Applies To
- Businesses paying Goods Transport Agencies (GTA)
- Companies paying Legal Fees to Advocates/Firms
- Companies paying Sitting Fees to Directors
- Registered persons buying from Unregistered (Specific Cases)
RCM Does NOT Apply To
- Salary paid to Directors (Employment Contract)
- Services by Employee to Employer
- Exempt Services (e.g., Transport of Agriculture produce)
- Renting to Unregistered Persons (Personal use)
Normal vs Reverse Charge: What's the difference?
Common Services under RCM (Section 9(3))
| Service Category | GST Rate | Condition |
|---|---|---|
| GTA (Transport) | 5% | If GTA has NOT opted for 12% Forward Charge. |
| Advocates / Firm | 18% | Legal services provided to a Business Entity. |
| Security Services | 18% | Provided by Non-Body Corporate to Registered Person. |
| Director Services | 18% | Fees paid by Company to its Directors. |
| Govt Services | 18% | Services by Govt (except Rent, Post, Transport) to Business. |
RCM Edge Cases & Advanced Rules
Import of Services
Any service imported for business purposes (e.g., Google Ads, Cloud Hosting) attracts IGST under RCM. You must pay this even if the invoice is in USD.
Mixed Invoices (Partial RCM)
If an invoice contains both RCM and Forward Charge items, RCM applies only to the specific line items (e.g., Rent-a-Cab). The rest is paid to the vendor.
Unspoken RCM Rules (The Traps)
Q. Can I use my Input Tax Credit (ITC) to pay RCM?
NO! This is the #1 mistake. Section 49(4) prohibits using ITC for RCM. You must pay RCM liability via CASH Ledger only. If you use ITC, you will be asked to pay again with interest.
Q. When can I claim the ITC of the RCM I paid?
You can claim it in the SAME month. Example: For March RCM, you pay in cash on April 20th (GSTR-3B) and claim the same amount as ITC in the same April 20th return.
Q. I am unregistered. Do I need to pay RCM?
Generally, no. RCM under Section 9(3) applies to the 'Recipient'. If the recipient is not registered, they usually cannot pay RCM via GST portal. However, if you are liable to be registered, you must register and pay.
Q. Does RCM apply to salary paid to Directors?
No. Salary paid to directors (as per employment contract) is neither supply of goods nor services. RCM applies only to 'Sitting Fees' or 'Professional Fees' paid to directors.
Critical Rule
RCM Liability must be paid via Electronic Cash Ledger only (Sec 49(4)). You cannot utilize your existing ITC balance to offset this liability.
Quick Rates
- GTA (Transport)5%
- Legal Fees18%
- Security18%
- Rent of Vehicle5%
Why check RCM?
- Avoid Interest
Late RCM payment attracts 18% interest.
- Claim ITC
Pay today, claim back instantly.