GST

Reverse Charge Mechanism (RCM)

A scenario where the recipient of a supply, rather than the supplier, is liable to pay GST to the government.

Normally the supplier collects and pays GST. Under the Reverse Charge Mechanism (RCM), that liability shifts to the recipient for certain notified goods and services — common examples include some transport (goods carriage) services and specified imports.

A business under RCM pays the tax itself and, where eligible, can claim it back as input tax credit. Marking such transactions correctly keeps the GSTR-3B liability and the books accurate.

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