Reverse charge mechanism (RCM) under GST

When reverse charge applies

• Section 9(3) of the CGST Act and Section 5(3) of the IGST Act: notified categories of goods and services, such as services of goods transport agencies and advocates to business entities, in the cases specified.
• Section 9(4) and Section 5(4): supplies by unregistered persons to notified classes of registered recipients.
• Import of services from outside India, including OIDAR services to registered businesses.
• Supplies through e-commerce operators in specified services, where the operator pays tax under Section 9(5), which is a related but separate mechanism.

How to comply

The recipient registers, even if below the threshold, and pays the tax through the electronic cash ledger. Input tax credit cannot be used to pay reverse charge tax. If the supplier is unregistered, the recipient issues a self invoice under Section 31(3)(f) and a payment voucher. The tax is reported in GSTR-3B Table 3.1(d), and credit, where eligible, is claimed in Table 4.

Time of supply for reverse charge follows Sections 12(3) and 13(3), generally linked to the date of payment or a set number of days after the supplier's invoice.

Common mistakes

Missing RCM on legal fees, freight and foreign software subscriptions is common. Another error is paying RCM through ITC. Rates for some services changed in September 2025, so check the current notification before computing the liability.

Get it handled for you

Want your returns filed and reconciled every month without mismatch notices? Our team handles it end to end. Call or WhatsApp +91 63677 44602, or use the form below.

This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.