GST Reverse Charge (RCM) Liability and ITC Calculator
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.
Your numbers
Value on which you pay RCM, excluding any GST. For GTA freight use the freight amount on the consignment note.
100 if the input is used for taxable outward supplies. Reduce for blocked credit under Section 17(5) or exempt supplies.
Your results
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.
True cost versus share of RCM tax claimable as ITC
Sweeps Share of the tax you can claim as ITC from 0 to 100, holding your other inputs fixed.
Automate RCM postings in your ERP
Optional: ask for a short review of how reverse charge tax codes are set up in your ERP.
Optional. The tool and every export work without this. No spam.
How to use the calculator
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.
- 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
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
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
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.
- 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
Frequently Asked Questions
Can I pay reverse charge GST using input tax credit?
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?
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?
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?
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.
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.
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