# GST Reverse Charge (RCM) Liability and ITC Calculator

> Source: https://netray.co/tools/gst-reverse-charge-liability-and-itc-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Work out the tax you must pay in cash under reverse charge, how it splits across CGST, SGST and IGST, and how much comes back as input tax credit.

## Category

regional

## Region

India

## Audience

- Finance controller
- GST accountant
- Indian manufacturer

## Tool

**Kind:** calculator

**Currency:** Rs 

**Inputs:**

#### Taxable value of the service or goods

**Key:** value

**Type:** number

**Default:** 250000

**Min:** 0

**Step:** 1000

**Unit:** Rs

**Help:** Value on which you pay RCM, excluding any GST. For GTA freight use the freight amount on the consignment note.

#### GST rate

**Key:** rate

**Type:** select

**Default:** 18

**Options:**

##### 5%

**Value:** 5

##### 12%

**Value:** 12

##### 18%

**Value:** 18

##### 28%

**Value:** 28

#### Place of supply

**Key:** intra

**Type:** select

**Default:** 1

**Options:**

##### Same state as you (CGST + SGST)

**Value:** 1

##### Another state (IGST)

**Value:** 0

#### Share of the tax you can claim as ITC

**Key:** itc_pct

**Type:** slider

**Default:** 100

**Min:** 0

**Max:** 100

**Step:** 5

**Unit:** %

**Help:** 100 if the input is used for taxable outward supplies. Reduce for blocked credit under Section 17(5) or exempt supplies.

**Outputs:**

#### Total RCM tax payable

**Key:** gst

**Expr:** value * rate / 100

**Format:** currency

**Primary:** true

**Description:** RCM tax must be paid through the electronic cash ledger, not set off against existing credit.

#### CGST component

**Key:** cgst

**Expr:** if(eq(intra,1), gst / 2, 0)

**Format:** currency

#### SGST / UTGST component

**Key:** sgst

**Expr:** if(eq(intra,1), gst / 2, 0)

**Format:** currency

#### IGST component

**Key:** igst

**Expr:** if(eq(intra,1), 0, gst)

**Format:** currency

#### ITC claimable after payment

**Key:** itc

**Expr:** gst * itc_pct / 100

**Format:** currency

**Description:** Claimed in the month the tax is paid, shown in Table 4A(3) of GSTR-3B.

#### True cost after ITC

**Key:** net_cost

**Expr:** value + gst - itc

**Format:** currency

**Primary:** true

**Chart:**

#### True cost versus share of RCM tax claimable as ITC

**Type:** line

**X:** itc_pct

**From:** 0

**To:** 100

**Steps:** 21

**Series:**

- net_cost

**Disclaimer:** Indicative calculation. RCM applicability depends on notifications under Section 9(3) and 9(4) and on the nature of the supply. Confirm with your tax adviser.

## Content

**Intro:** Under the reverse charge mechanism the buyer, not the supplier, pays GST to the government. This calculator shows the cash you must deposit, how the tax splits between CGST, SGST and IGST, and the credit you recover afterwards.

**Sections:**

#### How to use the calculator

**Body:** Enter the taxable value of the supply, choose the GST rate and say whether the place of supply is inside your state. The result shows the tax you must pay, the component split and the true cost after input tax credit. Use the slider to reflect partial eligibility, for example when the input is also used for exempt supplies or when credit is blocked. The chart shows how your final cost changes as the eligible share moves from none to full credit.

**Bullets:**

- Use the value excluding GST
- Pick IGST when the place of supply is another state
- Lower the ITC share for blocked or exempt-use inputs
- Export the result for your month-end working papers

#### The rule behind the numbers

**Body:** RCM applies to notified categories under Section 9(3), such as goods transport agency services, legal services from an advocate, sponsorship and security services from non-body-corporate suppliers, and to purchases from unregistered suppliers in notified cases under Section 9(4). The recipient pays tax in cash, issues a self-invoice where required, and then claims credit in the same return period if the input is eligible. Credit and liability are therefore a timing issue, but cash is out first.

#### Worked example

**Body:** A factory pays Rs 2,50,000 of freight to a goods transport agency, charged at 18 percent and billed within the state. RCM tax is Rs 45,000, split Rs 22,500 CGST and Rs 22,500 SGST. If the freight supports taxable output, the full Rs 45,000 comes back as credit and the true cost stays Rs 2,50,000. If half the use is for exempt supplies, only half is claimable and the true cost rises by the unclaimed tax.

#### Common mistakes

**Body:** Teams often try to pay RCM from the credit ledger, which is not allowed. Others forget the tax sits in a different table of GSTR-3B than normal outward liability, or claim credit before the cash payment is made. In ERP systems, RCM tax codes must post to a separate liability account and not net against input tax on the same document.

**Bullets:**

- Paying RCM from the electronic credit ledger
- Claiming ITC before the cash is paid
- Missing the self-invoice for unregistered purchases
- Using the wrong GST rate for freight

**Cta:** If RCM tax codes in your ERP keep needing manual journals, we can look at how your purchase postings are set up and automate the liability and credit entries.

**Faq:**

#### Can I pay reverse charge GST using input tax credit?

**Answer:** No. Tax payable under reverse charge has to be paid in cash through the electronic cash ledger. Once paid, you can claim the same amount as input tax credit in the same return if the supply is used for taxable business purposes and is not blocked.

#### When do I claim ITC on RCM?

**Answer:** You claim it in the tax period in which the RCM tax was paid in cash, reported in the inward supplies liable to reverse charge section of GSTR-3B. Paying in one month and claiming in an earlier month is not permitted.

#### Is the RCM split the same as normal GST?

**Answer:** Yes. For intra-state supplies the tax is half CGST and half SGST or UTGST. For inter-state supplies it is entirely IGST. The place of supply rules decide which applies, not the location of your bank.

#### Does this calculator cover composition dealers?

**Answer:** It does not model composition scheme rules. Composition taxpayers pay RCM too but cannot claim input tax credit, so set the ITC share to zero to see their true cost.

## Search terms

reverse charge GST calculator, RCM GST calculation, GST on GTA freight reverse charge, RCM liability calculator India, reverse charge ITC eligibility, GST on legal services RCM, RCM payment cash ledger, reverse charge mechanism GST example

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