GST Reverse Charge Mechanism (RCM): When You Pay GST on Purchases
S
Statura Team
Normally the supplier collects and pays GST. Under the Reverse Charge Mechanism (RCM), the recipient pays it directly to the government. Missing RCM is a frequent audit finding.
When Does RCM Apply?
- Notified goods/services (e.g. GTA transport, legal services, director fees).
- Purchases from unregistered suppliers in specified cases.
- Import of services — the Indian recipient pays GST under RCM.
Self-Invoicing
For RCM purchases from unregistered persons, the recipient must issue a self-invoice and a payment voucher.
Input Credit
GST paid under RCM is generally available as input tax credit, so it is often cash-flow neutral — but the compliance step is mandatory.
Statura handles RCM, self-invoicing and full GST compliance so nothing is missed.
#GST
#reverse charge
#RCM
#compliance