Reverse Charge Mechanism (RCM) under GST in 2026: Meaning, List of Services, Self-Invoice and GSTR-3B Reporting

Normally the seller charges GST and pays it to the government. Under the reverse charge mechanism (RCM) that flips: the buyer pays the tax directly. It catches businesses out because the supplier's bill shows no GST, yet the tax is still due — in cash, on time, and reported in a specific GSTR-3B table. This guide is for registered businesses that pay freight, legal fees, rent, director fees or security charges, and for accountants who need the current list. It explains what reverse charge means, the legal basis in sections 9(3) and 9(4), the notified goods and services as amended up to October 2026, time of supply, self-invoicing, input tax credit, GSTR-3B reporting and a full ₹ example.

Quick answer

Under the reverse charge mechanism, the recipient of a supply pays GST instead of the supplier. It applies to goods and services notified under section 9(3) of the CGST Act (and section 5(3) of the IGST Act) — such as goods transport agency freight, advocate fees, director sitting fees, security services by non-corporate agencies and commercial rent from an unregistered landlord — and to supplies from unregistered persons to notified classes under section 9(4). The recipient pays in cash, reports it in GSTR-3B Table 3.1(d) and can usually claim it back as input tax credit.

• Pay RCM tax from the cash ledger — input tax credit cannot be used for it

• Self-invoice within 30 days when the supplier is unregistered (rule 47A)

• Anyone liable to pay tax under RCM must register, whatever their turnover (section 24)

• Claim the ITC in Table 4A(3) of GSTR-3B once the tax is paid

What is reverse charge mechanism in GST?

GST is usually collected on a forward charge basis: the supplier issues a tax invoice, collects the tax from the buyer and pays it through its own return. Reverse charge moves that liability to the recipient. The supplier bills only the value; the recipient calculates the tax at the normal rate, pays it to the government and, where allowed, takes credit for it.

The government uses reverse charge for three reasons. Some suppliers are numerous and unorganised — individual advocates, truck operators issuing lorry receipts, small security agencies — and collecting tax from their business customers is simpler. Some suppliers are outside the tax net altogether, such as unregistered landlords, foreign service providers or government departments. And some supply chains have a history of evasion, such as metal scrap. In each case the recipient is a registered business that already files returns, so the tax is collected reliably.

Section 9(3) of the CGST Act lets the government notify categories of supply on which the recipient pays tax, whoever the supplier is. Section 9(4) lets it notify a class of registered persons who pay tax on specified supplies received from unregistered suppliers. The IGST Act mirrors these in sections 5(3) and 5(4) for inter-state supplies, so an inter-state RCM supply attracts IGST, while an intra-state one attracts CGST plus SGST.

Since 1 February 2019, section 9(4) no longer applies to every purchase from an unregistered supplier — only to notified classes. Today it is used mainly for real-estate promoters who fail to buy at least 80% of their inputs from registered suppliers. For most businesses, reverse charge means the section 9(3) lists.

How a reverse-charge supply works

Step 1

Supplier bills value only (no GST)

Step 2

You self-invoice if the supplier is unregistered

Step 3

Pay tax in cash — GSTR-3B Table 3.1(d)

Step 4

Claim ITC — Table 4A(3)

if used for business

Services under reverse charge: the 2026 list

The services list is in Notification 13/2017–Central Tax (Rate) (with matching IGST and UTGST notifications). It has been amended many times; the table below reflects the position after Notification 09/2024 (from 10 October 2024) and Notification 07/2025 (from 16 January 2025). The September 2025 GST rate changes did not alter this list. Tax is paid at the normal rate for the service — usually 18%, and 5% without ITC for GTA freight under the reverse-charge option.

Entry 1 is covered in detail in our guide to GST on freight, including the 5% and 18% GTA options and the Annexure V forward-charge declaration. Entry 15 depends on whether the vehicle operator charges GST on its invoice; if it does, there is no reverse charge. Check the supplier's invoice before booking.

Legal and director services in practice

For legal services, the recipient is any "business entity". A business entity whose aggregate turnover in the previous year was within the registration threshold is exempt from this tax under Notification 12/2017, so a micro business paying a lawyer usually owes nothing, while a registered company does. For directors, CBIC Circular 140/10/2020-GST clarified that salary paid to a whole-time director as an employee is outside GST, while sitting fees, commission and other payments to independent and non-executive directors are taxed under reverse charge at 18%.

Security services and the body-corporate test

Entry 14 turns on the supplier's legal form. If your security agency is a proprietorship, a partnership firm or an LLP — anyone other than a body corporate — you pay the 18% under reverse charge and the agency's invoice should show no tax. If the agency is a private or public limited company, it charges GST on a normal tax invoice. Mixing these up is one of the most common audit findings: a company that pays GST to a partnership agency on forward charge still owes the reverse-charge tax, and has to chase the agency for a refund of what it wrongly paid.

Rent under reverse charge: residential and commercial

Two entries now cover rent. Since 18 July 2022, renting of a residential dwelling to a registered person is under reverse charge (entry 5AA), whoever the owner is. An exemption remains where a registered proprietor rents a home in a personal capacity to live in, not for business.

Since 10 October 2024, entry 5AB has brought renting of any property other than a residential dwelling — shops, offices, godowns, factory sheds — by an unregistered owner to a registered tenant under reverse charge. A landlord earning below the registration threshold no longer creates a tax gap: the tenant pays 18% on the rent. From 16 January 2025, Notification 07/2025–Central Tax (Rate) excluded composition taxpayers as recipients, because they would have had to pay the tax without being able to claim credit. If your landlord is GST-registered, it charges GST on a normal invoice and there is no reverse charge.

Goods under reverse charge

Reverse charge on goods is narrower and sits in Notification 4/2017–Central Tax (Rate). The main entries are cashew nuts (not shelled or peeled), bidi wrapper (tendu) leaves, tobacco leaves and raw cotton supplied by an agriculturist to a registered person; silk yarn supplied by a person who makes it from raw silk or cocoons; and lottery tickets supplied by a State government or local authority to a lottery distributor. From 10 October 2024, metal scrap under chapters 72 to 81 supplied by an unregistered person to a registered person was added, following the 54th GST Council meeting. A registered seller of scrap still charges GST on forward charge, and from the same date the registered buyer of scrap from a registered seller deducts TDS under section 51.

Imported goods are not under reverse charge in the GST sense — the importer pays IGST with customs duty at the border. Imported services, by contrast, are: Notification 10/2017–Integrated Tax (Rate) makes the Indian business recipient of a service from a supplier outside India pay IGST under reverse charge. A subscription to a foreign software tool billed to your company, or fees paid to a foreign consultant, fall here.

Time of supply under reverse charge

Time of supply decides the month in which RCM tax becomes payable. Sections 12(3) and 13(3) of the CGST Act have their own rules for reverse-charge supplies, which differ from the forward-charge rules.

Time of supply under reverse charge — the earliest of these dates

	Goods — section 12(3)	Services — section 13(3)
Receipt	Date you receive the goods	—
Payment	Date of payment in your books or bank, whichever is earlier	Date of payment in your books or bank, whichever is earlier
Supplier's invoice	Day after 30 days from the supplier's invoice	Day after 60 days from the supplier's invoice
Self-invoice	—	Date of your self-invoice, where you must issue it (from 1 November 2024)
Fallback	Date of entry in your books	Date of entry in your books

Receipt

Goods — section 12(3)

Date you receive the goods

Services — section 13(3)

—

Payment

Goods — section 12(3)

Date of payment in your books or bank, whichever is earlier

Services — section 13(3)

Date of payment in your books or bank, whichever is earlier

Supplier's invoice

Goods — section 12(3)

Day after 30 days from the supplier's invoice

Services — section 13(3)

Day after 60 days from the supplier's invoice

Self-invoice

Goods — section 12(3)

—

Services — section 13(3)

Date of your self-invoice, where you must issue it (from 1 November 2024)

Fallback

Goods — section 12(3)

Date of entry in your books

Services — section 13(3)

Date of entry in your books

Take an advocate who bills your firm ₹1,00,000 on 1 April and is paid on 15 July. Payment comes after the 60-day point, so the time of supply is the day after the 60 days end — early June — and the ₹18,000 goes into June's GSTR-3B, not July's. Paying the advocate earlier, say on 20 April, makes April the month instead. Delaying the tax beyond the right month attracts interest at 18% a year under section 50, even though you would have claimed the same amount as credit.

For services from an associated enterprise outside India, the time of supply is the date of entry in your books or the date of payment, whichever is earlier.

Self-invoice and payment voucher

When the supplier is unregistered and you pay tax under reverse charge, nobody issues a tax invoice — so section 31(3)(f) makes you issue one to yourself. Rule 47A, in force from 1 November 2024, requires this self-invoice within 30 days of receiving the goods or services. A supplier registered only to deduct TDS counts as unregistered for this purpose. Section 31(3)(g) also requires a payment voucher when you pay the supplier.

A self-invoice carries the same particulars as any tax invoice. Our invoice generator can produce one with the reverse-charge flag.

What your self-invoice must show

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• Your name, address and GSTIN
• A serial number from a separate self-invoice series, and the date
• The supplier's name and address (and State)
• Description, HSN or SAC, quantity and taxable value
• Rate and amount of CGST and SGST, or IGST, and the place of supply
• The words 'tax payable on reverse charge'
• A matching payment voucher when you pay the supplier

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When the supplier is registered — a GTA, an advocate firm with a GSTIN, a registered director — the supplier issues its invoice with a note that tax is payable on reverse charge, and you do not self-invoice. Check the supplier's invoice carries that statement and its GSTIN; the supply should then appear in your GSTR-2B under the reverse-charge section.

Self-invoice timing also governs credit. Circular 211/5/2024-GST clarified that, for reverse-charge supplies from unregistered persons, the section 16(4) deadline for claiming ITC runs from the financial year in which you issue the self-invoice. A late self-invoice does not cost you the credit, but it does attract interest on the late tax and can attract a penalty.

Input tax credit on reverse charge

Reverse-charge tax is a real cash outflow but usually not a final cost. Once you have paid it, you can claim it as input tax credit in the same return, subject to the normal section 16 conditions — the supply must be used in the course of business, you must hold the invoice or self-invoice, and the credit must not be blocked by section 17(5).

The cash-first rule is strict. Section 49(4) lets the electronic credit ledger pay only "output tax", and section 2(82) excludes tax payable under reverse charge from that definition. So even a business sitting on lakhs of unused credit must find cash for its RCM liability. Since August 2024 the GST portal also keeps an RCM Liability/ITC Statement that tracks the RCM tax you declared against the RCM credit you claimed. GSTN's advisory of 29 December 2025 said it would start blocking GSTR-3B where RCM credit claimed exceeds RCM tax paid plus the statement's balance, and told taxpayers with a negative balance to fix it by paying the shortfall or reducing the credit.

Some reverse-charge credit is blocked or reduced. Rent-a-cab and passenger-vehicle hire are blocked by section 17(5) unless you use them for a specified business purpose. Composition taxpayers cannot claim any of it. Expenses for exempt supplies need reversal under rules 42 and 43. Our input tax credit guide covers those rules.

How to report reverse charge in GSTR-3B

Reverse charge touches three parts of GSTR-3B. Getting the tables right also keeps your RCM Liability/ITC Statement balanced.

Reporting RCM in GSTR-3B each month

1. 1

   Declare the liability in Table 3.1(d)

   Enter the taxable value and the CGST, SGST/UTGST or IGST for all inward supplies liable to reverse charge in the period — services from registered and unregistered suppliers, notified goods and imports of services.

2. 2

   Pay it in cash

   The payment table splits the RCM portion; it can be offset only from the electronic cash ledger. Add cash through PMT-06 if needed.

   Tip: Pay before filing — the portal won't let you offset RCM tax from the credit ledger.

3. 3

   Claim credit in Table 4A

   Claim credit on imported services in Table 4A(2) and on all other reverse-charge supplies in Table 4A(3), in the same return once the tax is paid.

4. 4

   Check the RCM statement

   Under Services > Ledger > RCM Liability/ITC Statement, confirm the closing balance is not negative.

   Open the GST portal
5. 5

   Reconcile with GSTR-2B

   Supplies from registered suppliers who reported them as reverse charge in their GSTR-1 appear in GSTR-2B. Self-invoiced supplies from unregistered suppliers will not — keep your own register.

Suppliers report their reverse-charge sales in GSTR-1 with the reverse-charge flag so they show up in your GSTR-2B. Our GSTR-3B guide explains the other tables.

Worked example: a month of reverse charge for a manufacturer

A registered engineering unit in Ahmedabad, Gujarat, has these expenses in August, all from suppliers in Gujarat:

The unit issues a self-invoice for the godown rent, because the landlord is unregistered, within 30 days — and does the same for any other unregistered supplier. In August's GSTR-3B it reports ₹3,30,000 of value and ₹52,900 of tax in Table 3.1(d), pays ₹52,900 from the cash ledger, and claims ₹52,900 of ITC in Table 4A(3). Its net tax cost is nil, but it needs ₹52,900 of cash on the 20th, and the credit only helps against next month's output tax if this month's is smaller.

If the godown landlord were a registered person, the landlord would charge ₹10,800 on a tax invoice instead, and the unit's RCM total would fall to ₹42,100. If the security agency were a private limited company, it would charge ₹14,400 itself. Run any line through our GST calculator.

Common mistakes and how to fix them

Paying RCM from credit. The portal blocks it, but manual adjustments in books often assume credit was used. Pay the cash, and if you over-claimed, reverse the credit in Table 4B.

Paying GST to the supplier and skipping RCM. If a non-corporate security agency or an advocate charges you GST by mistake, that payment does not discharge your reverse-charge liability. Pay the RCM, ask the supplier to issue a credit note and refund the GST, and do not claim credit on the wrongly charged tax.

Missing the registration trigger. Section 24 makes anyone liable to pay tax under reverse charge register compulsorily, whatever their turnover. A small firm below the GST threshold that pays a goods transport agency for freight can be caught by this — check before assuming you are outside GST.

Late self-invoices. Raising a single self-invoice at year-end for twelve months of rent breaks rule 47A and attracts interest for each month's late tax. Raise them monthly.

Ignoring the January 2025 changes. Body-corporate sponsors now charge GST on forward charge, and composition taxpayers no longer pay RCM on commercial rent. Update your vendor masters so your accounting system applies the right treatment.

Official links

• GST portal — GSTR-3B, PMT-06 and RCM Liability/ITC StatementServices > Returns / Ledger
• CGST Act section 9 — reverse chargeCBIC tax information portal
• CGST Act section 13 — time of supply of servicesSection 12 for goods is in the same chapter
• Notification 13/2017–Central Tax (Rate)Original RCM services list — read with later amendments
• CGST rate notifications (amendments incl. 09/2024 and 07/2025)GST Council
• Circular 211/5/2024-GSTITC time limit on RCM supplies from unregistered persons

What to do next

List every vendor you pay for freight, legal work, rent, security, directors' fees and foreign services, note whether each is registered and whether it is a body corporate, and set your accounting software to flag reverse charge automatically. If you are a small business weighing whether you need GST at all, our composition scheme guide and GST registration guide explain the options.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is reverse charge mechanism in GST with an example?

Under reverse charge, the buyer pays GST to the government instead of the seller. For example, if your registered company pays an advocate ₹1,00,000 for a court case, the advocate charges no GST; your company pays 18% — ₹18,000 — in cash through GSTR-3B Table 3.1(d) and, if the service is for business, claims the same ₹18,000 as input tax credit.

Which services come under reverse charge in 2026?

The main ones in Notification 13/2017–Central Tax (Rate) are goods transport agency freight, legal services by advocates, arbitral tribunals, sponsorship by non-corporate sponsors, most government services, renting of residential dwellings to registered persons, renting of commercial property by unregistered owners, director services, insurance and recovery agents, security services by non-corporate agencies, and renting of passenger vehicles to body corporates.

Can I pay reverse charge GST using input tax credit?

No. Tax payable under reverse charge is not 'output tax' under section 2(82) of the CGST Act, so the electronic credit ledger cannot be used. You must pay it in cash from the electronic cash ledger. Once paid, you can claim it as input tax credit in the same return if the supply is used for business and section 16 conditions are met.

Is RCM applicable on rent paid to an unregistered landlord?

Yes, for commercial property, since 10 October 2024. A GST-registered tenant paying rent for a shop, office or godown to an unregistered landlord pays 18% under reverse charge. Composition taxpayers were taken out of this rule from 16 January 2025. Renting a residential dwelling to a registered person is also under reverse charge, whoever the landlord is.

What is the time limit for a self-invoice under RCM?

When you buy a reverse-charge supply from an unregistered supplier, you issue the invoice yourself under section 31(3)(f). Rule 47A, in force from 1 November 2024, requires it within 30 days of receiving the goods or services. You also issue a payment voucher when you pay the supplier.

Do composition dealers have to pay GST under reverse charge?

Yes. A composition taxpayer must pay reverse-charge tax at the normal rate on notified supplies such as GTA freight and legal fees, and cannot claim it back as credit. The exceptions are commercial rent from an unregistered landlord and security services, from which composition taxpayers are excluded.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.CGST Act 2017, section 9 — levy, reverse charge (9(3), 9(4)) and e-commerce (9(5)) — CBIC · accessed 7 October 2026
2. 2.CGST Act 2017, sections 12 and 13 — time of supply — CBIC · accessed 7 October 2026
3. 3.CGST Act 2017, section 31 — tax invoice, self-invoice and payment voucher — CBIC · accessed 7 October 2026
4. 4.Notification No. 13/2017 – Central Tax (Rate) (reverse charge on services, original) — CBIC · accessed 7 October 2026
5. 5.CGST (Rate) notifications list — Notification 07/2025 and 09/2024 amending Notification 13/2017 — GST Council · accessed 7 October 2026
6. 6.Circular No. 211/5/2024-GST — time limit for ITC on RCM supplies from unregistered persons — CBIC · accessed 7 October 2026
7. 7.Revised up-to-date list of services covered under GST reverse charge (as on 16.01.2025) — ABC Aus · accessed 7 October 2026
8. 8.RCM time of supply and self-invoice rules effective 1 November 2024 — TaxGuru · accessed 7 October 2026
9. 9.Renting of commercial property excluded from RCM for composition taxpayers (Notification 07/2025-CT(R)) — A2Z Taxcorp · accessed 7 October 2026
10. 10.RCM on goods vs services: entries, GSTR-3B tables and compliance — Busy · accessed 7 October 2026
11. 11.Advisory on RCM Liability/ITC Statement and Electronic Credit Reversal and Re-claimed Statement (29 December 2025) — Taxo (reproducing GSTN advisory) · accessed 7 October 2026