Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Pay in cash, then claim
RCM works in two legs. First, you pay the GST in cash (you can’t use existing credit to discharge an RCM liability). Then, in the same GSTR-3B, you claim that GST as ITC — provided the underlying expense is for your business and not in the blocked list.
When you can't claim
If the RCM expense is blocked (for personal use, or a category barred under Section 17(5)), you still must pay the RCM but cannot claim the credit — so it becomes a real cost. For ordinary business inputs like legal fees or business rent, the credit is available. Confirm the expense isn’t blocked before claiming.
A worked example
Example: you pay ₹18,000 RCM on legal fees in cash this month, then claim ₹18,000 ITC in the same return — net effect nil, but both entries are made. If instead the RCM were on something blocked, you’d pay the ₹18,000 with no offsetting credit. Recording both legs correctly is what auditors check. Our team can ensure your RCM is paid and claimed properly.