RCM Compliance⏱ 5 min

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RCM Register

Auto-classify all 15 RCM categories from Tally. Confirmed entries plus missed RCM flagged.

Reverse Charge Mechanism under Section 9(3) applies to 15 notified categories of services. GTA freight, commercial property rent from unregistered landlords, legal services from individual advocates, security manpower, director remuneration — all require the recipient to pay GST directly. GSTAgent auto-classifies all these from Tally and flags any that were missed.

Sec 9(3)15 categoriesSelf-invoiceJournal

View RCM Register →

The Problem

Why this needs to be automated

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RCM categories are easy to miss

A freight payment to an unregistered tempo service, rent paid to an individual landlord, fees to a lawyer — none of these carry GST on the invoice. The CA must identify them from the ledger name alone.

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Self-invoices required for each RCM entry

Every RCM transaction requires a self-invoice under Section 31(3)(f). Missing self-invoices attract ₹50,000 penalty per offence — separate from the RCM tax liability.

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RCM cannot be paid from ITC balance

RCM must be paid in cash via GSTR-3B Table 3.1(d). Paying from ITC balance is not permitted and makes the payment invalid — attracting demand for the full amount again.

Regulatory Context

The law that makes this matter

Sec 9(3)

15 notified RCM categories

GTA, advocate/legal firm, arbitral tribunal, sponsorship, government/local authority, director services, insurance agent, recovery agent, transfer of goods by shipping, import of services, and 5 more.

Sec 31(3)(f)

Self-invoice mandatory

Recipient of RCM supply must issue a self-invoice in lieu of invoice from supplier. Required for each RCM transaction. Penalty ₹50,000 per offence for failure.

Sec 49(4)

Cash payment for RCM

RCM liability cannot be discharged using input tax credit. Must be paid in cash from electronic cash ledger via GSTR-3B Table 3.1(d).

How It Works

4 steps. Mostly automated.

Sync from TallyPrime

Bridge fetches all Journal, Payment, and Purchase vouchers. RCM journal entries — with CGST RCM INPUT/OUTPUT ledgers — are identified by the two-pass classifier.

Pass 1 — keyword match

Voucher text matched against 15 RCM keyword patterns — GTA, rent, legal, security, director, OIDAR import and more. Expanded keyword list catches tempo service, legal cons, & associates etc.

Pass 2 — ledger name regex

Individual ledger names matched by regex — "Rent Paid", "Mamta Gupta Rent Account", "Freight Charges" all caught even if voucher text alone doesn't match.

Missed RCM flagged

Entries matching RCM patterns with zero GST booked are separated as "Possible Missed RCM" — a High severity audit finding with Section 9(3) reference and penalty exposure.

Sample Output

What you actually see

Sample data — Metro Print Works Pvt. Ltd · FY 2026-27

RCM entries confirmed

Commercial Rent (Sec 9(3))

9 entries — ₹1,38,600 liability

GTA Freight — missed RCM

3 entries — ₹9,200 est. liability

Legal fees — missed RCM

1 entry — ₹10,800 est. liability

Total confirmed RCM liability

₹1,38,600

Possible missed RCM

₹20,000 est. exposure

Sample data for illustration only. Actual results depend on your client's Tally data. Not professional tax advice.

Edge Cases

How GSTAgent handles the tricky ones

Scenario	GSTAgent Output
"SGST RCM OUTPUT" in journal ledger list	is_rcm_journal guard prevents false output-skip — entry correctly classified
HDFC Bank payment entry for rent	is_bank_payment filter removes bank entries before classification
Registered supplier paying freight — GSTIN present	skip_rcm guard — registered GST purchase, not classified as RCM
"Verma Tempo Service" — not in keyword list	LEDGER_CAT_MAP Pass 2 catches "tempo service" pattern → RCM_GTA

RCM categories auto-classified

2-pass

Classifier — keyword + ledger regex

5 min

vs hours of manual ledger review

RCM entries missed

FAQ

Common questions

How does GSTAgent catch RCM in Journal entries?

Journal entries for RCM have both INPUT and OUTPUT RCM ledgers. The bridge uses abs() on INPUT amounts and excludes OUTPUT ledgers — giving correct CGST/SGST values even when Tally stores debits as negative.

What is the rate of RCM for commercial rent?

Commercial property rent from an unregistered landlord attracts RCM at 18% (9% CGST + 9% SGST). Applicable since July 2022 notification.

Can I claim ITC on RCM paid in cash?

Yes — ITC on RCM is available in the same period the RCM is paid in cash. Claim in GSTR-3B Table 4(A)(3) only after cash payment is made.

What if the landlord is registered?

If the landlord has a GST registration and charges GST on the invoice, it is a regular B2B purchase — not RCM. RCM applies only to unregistered landlords.

Does GTA RCM apply if the transporter charges 12% GST?

No — if the GTA opts for 12% GST and charges it on the invoice, the recipient can claim ITC normally. RCM at 5% applies only when GTA does not charge GST.

Ready to run this workflow?

A GSTAgent subscription code is required. CA firm plans from ₹1,400/month for 10 clients.

View RCM Register →View pricing ← All workflows