GST RCM Calculator (2026)

Calculate exact Reverse Charge Mechanism (RCM) liabilities for GTA, Legal, and Security services. Know your CGST, SGST, and IGST payouts instantly.

Rules | Formula | FAQs

Service Details

Liability Output

Total Tax to Pay (in Cash)

₹0
Bill Amount Paid to Supplier ₹0
Applicable RCM Rate 0%
CGST Payable ₹0
SGST Payable ₹0

Crucial Alerts

  • 🚫 Must pay in CASH. You cannot use existing ITC ledger balance.
  • ✅ ITC available in the same month (if used for business).

Calculation Rule

Total RCM Tax = Transaction Value × RCM Rate

Step-by-Step Example (GTA)

If you hire a truck (GTA) for ₹50,000 within your state:
  • You pay transporter exactly ₹50,000.
  • You pay 5% RCM (₹2,500) to the Government.
  • CGST = ₹1,250 | SGST = ₹1,250.
  • You can claim ₹2,500 ITC in your GSTR-3B.

What is the Reverse Charge Mechanism?

Under the GST Act, generally, the supplier of goods or services is liable to pay GST. However, under the Reverse Charge Mechanism (Section 9(3) and 9(4) of CGST Act), the liability to pay tax is reversed. The *buyer or receiver* of the goods/services must pay the tax directly to the government.

Common RCM Services & Rates Table

Service Type Supplier RCM Rate
Goods Transport Agency (GTA) GTA not paying 12% forward charge 5%
Legal Services Individual Advocate / Firm 18%
Security Services Any non-corporate entity 18%
Sponsorship Services Any person 18%
Renting of Motor Vehicle Non-corporate (Fuel included) 5%

Strict Limitations

  • Cash Payment Only: You cannot use your electronic credit ledger to pay RCM liabilities. It must be paid via challan from your bank account.
  • Self-Invoicing: If you buy from an unregistered person, you must issue a self-invoice and a payment voucher.

Input Tax Credit (ITC) on RCM

Once you pay the RCM liability in cash, you are immediately eligible to claim it back as Input Tax Credit (ITC) in the same month's GSTR-3B return, provided the service is used for business and is not blocked under Section 17(5). However, Composition dealers cannot claim this ITC.

Penalties for Missing RCM

Many businesses forget to pay RCM on GTA and Legal fees, which is caught years later during GST audits.

18% Interest

If caught late, you must pay the RCM tax plus a heavy 18% p.a. interest from the original due date.

Time Barred ITC

If you pay RCM after November of the next financial year, the ITC is permanently blocked! You pay the tax, but lose the credit.

Frequently Asked Questions

1. What is Reverse Charge Mechanism (RCM)?
Typically, the supplier of goods or services pays the GST. Under RCM, the liability to pay GST shifts from the supplier to the recipient of the goods or services.
2. What are common services under RCM?
Common services include Goods Transport Agency (GTA), Legal Services by advocates, Sponsorship services, Security services, and Renting of motor vehicles.
3. What is the RCM rate for Goods Transport Agency (GTA)?
If the GTA does not charge forward charge GST, the recipient must pay 5% GST under RCM. The recipient can claim ITC on this 5% payment.
4. What is the RCM rate for Legal Services?
Legal services provided by an individual advocate or senior advocate to a business entity are subject to 18% GST under RCM.
5. Can I claim Input Tax Credit (ITC) for RCM paid?
Yes, a registered person who pays tax under RCM can claim ITC for that amount in the same month, provided the goods or services are used for business purposes.
6. Can I use ITC to pay RCM liabilities?
No! RCM liabilities MUST be paid in cash (using the electronic cash ledger). You cannot use your existing Input Tax Credit balance to pay off RCM.
7. Does a composition dealer have to pay RCM?
Yes, composition dealers must also pay tax under RCM if they purchase applicable goods/services. However, they CANNOT claim ITC for the RCM paid.
8. Do I need to issue an invoice for RCM?
Yes, if you purchase from an unregistered supplier and pay RCM, you must issue a 'Self-Invoice' and a Payment Voucher under Section 31 of the CGST Act.

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