Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The common RCM expenses
Under reverse charge, the recipient pays the GST. Frequently-seen items include: goods transport agency (GTA) freight, legal services from an advocate or law firm, director’s sitting fees, sponsorship, import of services, and security and manpower services from certain suppliers. The RCM list changes by notification — confirm the current entries.
Pay first, then claim
You pay the RCM tax in cash (it can’t be set off from credit) when filing GSTR-3B, and then claim it back as ITC in the same return if the expense is for your business and not blocked. For genuinely business-use expenses it is usually tax-neutral, but the cash-then-credit step must be done correctly.
A worked example
Example: you pay ₹50,000 to a transporter and ₹30,000 to an advocate. You pay GST on both under RCM in cash, then claim the same amounts as ITC — net neutral, but you must record both legs. Forgetting the RCM liability is a common audit issue, because the department can spot the expense and ask why no RCM was paid. Our team can map your RCM expenses.