{"id":11086,"date":"2026-08-30T14:17:38","date_gmt":"2026-08-30T14:17:38","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=11086"},"modified":"2026-08-30T14:22:36","modified_gmt":"2026-08-30T14:22:36","slug":"complete-guide-on-reverse-charge-mechanism-under-gst","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/","title":{"rendered":"Complete Guide on Reverse Charge Mechanism under GST"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-11087\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm.jpeg\" alt=\"rcm 2026 \" width=\"1280\" height=\"2224\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm.jpeg 1280w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm-173x300.jpeg 173w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm-589x1024.jpeg 589w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm-768x1334.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm-884x1536.jpeg 884w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm-1179x2048.jpeg 1179w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/08\/rcm-800x1390.jpeg 800w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a948570b2f05\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a948570b2f05\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Complete_2026_Guide_on_Reverse_Charge_Mechanism_under_GST\" title=\"Complete 2026 Guide on Reverse Charge Mechanism under GST \">Complete 2026 Guide on Reverse Charge Mechanism under GST <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Major_Services_Covered_Under_Reverse_Charge_Mechanism\" title=\"Major Services Covered Under Reverse Charge Mechanism \">Major Services Covered Under Reverse Charge Mechanism <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Goods_Transport_Agency_GTA_Services\" title=\" Goods Transport Agency (GTA) Services: \"> Goods Transport Agency (GTA) Services: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Legal_Services\" title=\" Legal Services: \"> Legal Services: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Arbitral_Tribunal_Services\" title=\" Arbitral Tribunal Services\"> Arbitral Tribunal Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Sponsorship_Services\" title=\" Sponsorship Services\"> Sponsorship Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Government_Services\" title=\" Government Services\"> Government Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Renting_of_Immovable_Property_by_Government\" title=\" Renting of Immovable Property by Government\"> Renting of Immovable Property by Government<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Directors_Services\" title=\" Director&#8217;s Services\"> Director&#8217;s Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Insurance_Agent_Services\" title=\" Insurance Agent Services\"> Insurance Agent Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Recovery_Agent_Services\" title=\" Recovery Agent Services\"> Recovery Agent Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Security_Services\" title=\" Security Services\"> Security Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Renting_of_Motor_Vehicles\" title=\" Renting of Motor Vehicles\"> Renting of Motor Vehicles<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Direct_Selling_Agent_DSA_Services\" title=\" Direct Selling Agent (DSA) Services\"> Direct Selling Agent (DSA) Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Business_Correspondent_Business_Facilitator_Services\" title=\" Business Correspondent \/ Business Facilitator Services\"> Business Correspondent \/ Business Facilitator Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Development_Rights_FSI_and_Long-Term_Lease_of_Land\" title=\" Development Rights, FSI and Long-Term Lease of Land\"> Development Rights, FSI and Long-Term Lease of Land<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Renting_of_Residential_Dwelling_to_Registered_Persons\" title=\" Renting of Residential Dwelling to Registered Persons\"> Renting of Residential Dwelling to Registered Persons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Import_of_Services_Under_GST_%E2%80%93_Important_RCM_Provision\" title=\"Import of Services Under GST \u2013 Important RCM Provision\">Import of Services Under GST \u2013 Important RCM Provision<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Common_Examples_of_Reverse_Charge_Mechanism_under_Import_of_Services\" title=\"Common Examples of Reverse Charge Mechanism under Import of Services\">Common Examples of Reverse Charge Mechanism under Import of Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Reverse_Charge_Mechanism_on_Goods\" title=\"Reverse Charge Mechanism on Goods\">Reverse Charge Mechanism on Goods<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Section_94_%E2%80%93_Purchases_from_Unregistered_Suppliers\" title=\"Section 9(4) \u2013 Purchases from Unregistered Suppliers\">Section 9(4) \u2013 Purchases from Unregistered Suppliers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Practical_GST_Compliance_Under_the_Reverse_Charge_Mechanism\" title=\"Practical GST Compliance Under the Reverse Charge Mechanism. \">Practical GST Compliance Under the Reverse Charge Mechanism. <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Self-Invoice_and_Payment_Voucher\" title=\"Self-Invoice and Payment Voucher\">Self-Invoice and Payment Voucher<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.caindelhiindia.com\/blog\/complete-guide-on-reverse-charge-mechanism-under-gst\/#Key_Takeaway_from_Reverse_Charge_Mechanism_update_in_2026\" title=\"Key Takeaway from Reverse Charge Mechanism update in 2026 \">Key Takeaway from Reverse Charge Mechanism update in 2026 <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Complete_2026_Guide_on_Reverse_Charge_Mechanism_under_GST\"><\/span><span style=\"color: #000080;\"><strong>Complete 2026 Guide on Reverse Charge Mechanism under GST <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As per 2026 updated RCM list &amp; RCM rules, the Reverse Charge Mechanism (RCM) is a GST provision where the recipient of goods or services is liable to pay GST instead of the supplier. The legal basis for RCM is provided under Section 9(3) and 9(4) of the of the <span class=\"iNqyIf\" data-sfc-cp=\"\" data-sfc-root=\"ep\" data-complete=\"true\" data-copy-service-computed-style=\"font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 16px; font-weight: 400; margin: 0px; text-decoration: none; border-bottom: 0px rgb(10, 10, 10);\">Central Goods and Services Tax Act 2017 <\/span>and Section 5(3) and 5(4) of the IGST Act, 2017.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Major_Services_Covered_Under_Reverse_Charge_Mechanism\"><\/span><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/archives\/updated-rcm-list-and-rcm-rules-2026.pdf\"><strong>Major Services Covered Under Reverse Charge Mechanism <\/strong><\/a><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Goods_Transport_Agency_GTA_Services\"><\/span><span style=\"color: #000080;\"><strong> Goods Transport Agency (GTA) Services: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If GTA services are provided to specified recipients such as companies, registered persons, partnership firms, factories, societies, etc., GST is payable by the recipient under RCM subject to prescribed conditions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Legal_Services\"><\/span><span style=\"color: #000080;\"><strong> Legal Services: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Services provided by individual advocates, senior advocates, and firms of advocates to a business entity located in India are covered under RCM. The business entity is liable to pay GST.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Arbitral_Tribunal_Services\"><\/span><span style=\"color: #000080;\"><strong> Arbitral Tribunal Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where an arbitral tribunal provides services to a business entity, the recipient business entity pays GST under RCM.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Sponsorship_Services\"><\/span><span style=\"color: #000080;\"><strong> Sponsorship Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When sponsorship services are supplied to a body corporate or partnership firm, GST liability shifts to the recipient under the Reverse Charge Mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Government_Services\"><\/span><span style=\"color: #000080;\"><strong> Government Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Specified services provided by the central government, state government, union territory, or local authority to a business entity attract GST under reverse charge, subject to exclusions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Renting_of_Immovable_Property_by_Government\"><\/span><span style=\"color: #000080;\"><strong> Renting of Immovable Property by Government<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When the government rents immovable property to a registered person, GST is payable by the registered recipient under the reverse charge mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Directors_Services\"><\/span><span style=\"color: #000080;\"><strong> Director&#8217;s Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Services provided by directors to a company or body corporate are generally covered under the reverse charge mechanism. The company is liable to pay GST.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Insurance_Agent_Services\"><\/span><span style=\"color: #000080;\"><strong> Insurance Agent Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Commission paid to insurance agents attracts Reverse Charge Mechanism and the insurance company pays GST.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Recovery_Agent_Services\"><\/span><span style=\"color: #000080;\"><strong> Recovery Agent Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Recovery agents providing services to banks, financial institutions, and NBFCs are covered under the reverse charge mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Security_Services\"><\/span><span style=\"color: #000080;\"><strong> Security Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Security services supplied by a non-body corporate to a registered person generally attract GST under the reverse charge mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Renting_of_Motor_Vehicles\"><\/span><span style=\"color: #000080;\"><strong> Renting of Motor Vehicles<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where motor vehicle renting services are provided by a non-body corporate to a body corporate under specified conditions, GST is payable under Reverse Charge Mechanism by the recipient company.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Direct_Selling_Agent_DSA_Services\"><\/span><span style=\"color: #000080;\"><strong> Direct Selling Agent (DSA) Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Services provided by an individual DSA to a bank or NBFC attract the Reverse Charge Mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Business_Correspondent_Business_Facilitator_Services\"><\/span><span style=\"color: #000080;\"><strong> Business Correspondent \/ Business Facilitator Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Banks receiving services from business correspondents and business facilitators are liable to pay GST under the reverse charge mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Development_Rights_FSI_and_Long-Term_Lease_of_Land\"><\/span><span style=\"color: #000080;\"><strong> Development Rights, FSI and Long-Term Lease of Land<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Promoters may be liable to pay GST under the Reverse Charge Mechanism in specified real estate transactions involving development rights, FSI, or long-term lease of land.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Renting_of_Residential_Dwelling_to_Registered_Persons\"><\/span><span style=\"color: #000080;\"><strong> Renting of Residential Dwelling to Registered Persons<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If a registered person takes a residential property on rent for business or commercial purposes from an unregistered landlord, GST is payable under the Reverse Charge Mechanism by the registered tenant.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Import_of_Services_Under_GST_%E2%80%93_Important_RCM_Provision\"><\/span><span style=\"color: #000080;\"><strong>Import of Services Under GST \u2013 Important RCM Provision<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The following conditions constitute an import of service Supplier located outside India, Recipient located in India, Place of supply situated in India.,Where these conditions are satisfied, IGST is generally payable by the Indian recipient under Reverse Charge Mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Common_Examples_of_Reverse_Charge_Mechanism_under_Import_of_Services\"><\/span><a href=\"https:\/\/carajput.com\/archives\/updated-rcm-list-and-rcm-rules-2026.pdf\"><span style=\"color: #000080;\"><strong>Common Examples of Reverse Charge Mechanism under Import of Services<\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Foreign legal consultancy.<\/li>\n<li>Software subscriptions (ChatGPT, Claude, SaaS platforms)<\/li>\n<li>Foreign management consultancy<\/li>\n<li>Overseas engineering or technical services<\/li>\n<li>International advertising services<\/li>\n<li>Royalty and intellectual property payments<\/li>\n<li>Services from foreign parent companies to Indian subsidiaries<\/li>\n<\/ul>\n<p>In such cases, the Indian recipient generally pays IGST under the Reverse Charge Mechanism.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reverse_Charge_Mechanism_on_Goods\"><\/span><span style=\"color: #000080;\"><strong>Reverse Charge Mechanism on Goods<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>RCM is applicable not only on services but also to certain notified goods, including cashew nuts (unprocessed), Tendu leaves, tobacco leaves, silk yarn, and lottery transactions under notified structures subject to specified conditions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Section_94_%E2%80%93_Purchases_from_Unregistered_Suppliers\"><\/span><span style=\"color: #000080;\"><strong>Section 9(4) \u2013 Purchases from Unregistered Suppliers<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>A common myth is that every purchase from an unregistered supplier attracts GST under RCM. This is incorrect. Section 9(4) of the <span class=\"iNqyIf\" data-sfc-cp=\"\" data-sfc-root=\"ep\" data-complete=\"true\" data-copy-service-computed-style=\"font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 16px; font-weight: 400; margin: 0px; text-decoration: none; border-bottom: 0px rgb(10, 10, 10);\">Central Goods and Services Tax Act <\/span>currently applies only to Notified categories of registered persons and Specified supplies<\/li>\n<li>The most significant application is in the real estate sector involving promoters. Normal business purchases from unregistered vendors generally do not attract RCM merely because the supplier is unregistered.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Practical_GST_Compliance_Under_the_Reverse_Charge_Mechanism\"><\/span><span style=\"color: #000080;\"><strong>Practical GST Compliance Under the Reverse Charge Mechanism. <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong><span style=\"color: #000080;\">Payment Must Be Made in Cash:<\/span> <\/strong>Reverse Charge Mechanism liability cannot generally be discharged using Input Tax Credit (ITC). GST must first be paid in cash, and thereafter eligible ITC can be claimed.<\/p>\n<p><span style=\"color: #000080;\"><strong>Type of Tax<\/strong><\/span><\/p>\n<ul>\n<li>Intra-State Supply \u2192 CGST + SGST<\/li>\n<li>Inter-State Supply \/ Import of Services \u2192 IGST<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Self-Invoice_and_Payment_Voucher\"><\/span><span style=\"color: #000080;\"><strong>Self-Invoice and Payment Voucher<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Recipients liable under Reverse Charge Mechanism may be required to issue Self-invoice and payment voucher and report the same appropriately in GST returns.<\/p>\n<ul>\n<li><strong><span style=\"color: #000080;\">ITC Eligibility<\/span>: <\/strong>Even after paying GST under the Reverse Charge Mechanism, ITC is available only if Used for business purposes, proper documentation is available, tax has been paid, and conditions of Section 16 of the <span class=\"iNqyIf\" data-sfc-cp=\"\" data-sfc-root=\"ep\" data-complete=\"true\" data-copy-service-computed-style=\"font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 16px; font-weight: 400; margin: 0px; text-decoration: none; border-bottom: 0px rgb(10, 10, 10);\">Central Goods and Services Tax Act<\/span> are satisfied. and credit is not blocked u\/s 17(5) of the <span class=\"iNqyIf\" data-sfc-cp=\"\" data-sfc-root=\"ep\" data-complete=\"true\" data-copy-service-computed-style=\"font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 16px; font-weight: 400; margin: 0px; text-decoration: none; border-bottom: 0px rgb(10, 10, 10);\">Central Goods and Services Tax Act<\/span><\/li>\n<li><span style=\"color: #000080;\"><strong>Time Limit for Claiming RCM ITC: <\/strong><\/span>As clarified through Circular No. 211\/5\/2024-GST, the time limit for claiming ITC depends upon the financial year in which the self-invoice is issued, not the year in which services were received.<\/li>\n<li><span style=\"color: #000080;\"><strong>180-Day Payment Rule Not Applicable: <\/strong><\/span>The normal supplier payment condition does not apply to supplies covered under reverse charge. Therefore, the 180-day payment reversal provisions are generally not applicable to reverse charge mechanism supplies.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Key_Takeaway_from_Reverse_Charge_Mechanism_update_in_2026\"><\/span><span style=\"color: #000080;\"><strong>Key Takeaway from Reverse Charge Mechanism update in 2026 <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Businesses should carefully examine transactions involving legal fees, director remuneration, security services, GTA, import of services, residential property rented for business purposes, and foreign software subscriptions such as ChatGPT or other overseas SaaS tools, since these are among the most frequently missed RCM liabilities. Proper payment of GST under the Reverse Charge Mechanism, timely self-invoicing, and correct ITC claims are essential to avoid future GST notices, interest, and penalties.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Complete 2026 Guide on Reverse Charge Mechanism under GST As per 2026 updated RCM list &amp; RCM rules, the Reverse Charge Mechanism (RCM) is a GST provision where the recipient of goods or services is liable to pay GST instead of the supplier. The legal basis for RCM is provided under Section 9(3) and 9(4) &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1287],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/11086"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=11086"}],"version-history":[{"count":3,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/11086\/revisions"}],"predecessor-version":[{"id":11090,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/11086\/revisions\/11090"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=11086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=11086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=11086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}