Reverse Charge Mechanism (RCM)

Reverse charge mechanism places GST liability on the recipient, triggering registration, ITC rules, time of supply and compliance duties.

The Reverse Charge Mechanism places GST liability on the recipient for notified supplies and for taxable supplies from unregistered suppliers; recipients must register regardless of turnover thresholds. Reverse charge tax is paid from the electronic cash ledger and may be claimed as input tax credit by the recipient if eligible. Time of supply rules differ (earliest of receipt, payment, or prescribed post invoice days for goods and services), and compliance includes specific invoicing, record keeping, invoice level reporting, and recipient issuance deadlines. The handbook lists notified goods and services subject to reverse charge.