How to Report RCM Tax and Claim ITC in GSTR-3B

How to report RCM in GSTR-3B starts with the tax you pay in cash. Under GST, some supplies are taxed under the reverse charge mechanism (RCM). The recipient, not the supplier, pays the tax.

You first declare that tax in your GSTR-3B and pay it in cash. Only after the tax is paid, and only if the other ITC conditions are met, can you claim the eligible part as input tax credit (ITC). You do not automatically get the same amount back.

Who pays tax under RCM

For intra-State supplies, section 9(3) of the CGST Act lets the Government notify supplies on which the recipient pays the tax. Section 9(4) does the same for supplies received from an unregistered person, but only in the cases that are notified. The IGST Act has matching rules in sections 5(3) and 5(4) for inter-State supplies.

Common notified cases, with their current conditions, include:

• Legal services by an individual advocate (including a senior advocate) or a firm of advocates, to a business entity located in the taxable territory, where the supply is taxable — Notification No. 13/2017–Central Tax (Rate), as amended.
• Goods Transport Agency (GTA) services, when the GTA has not opted to pay tax under forward charge, and the recipient is in a class named in that notification. From 22 September 2025, the rate options for GTA services are 5% without ITC to the GTA, or 18% with full ITC where the GTA so opts under forward charge — Notification No. 15/2025–Central Tax (Rate), read with the official GST 2.0 FAQ.
• Security services (supply of security personnel) by a person other than a body corporate, to a registered person. This does not apply if the recipient pays tax under section 10 (composition), or is a specified government, local authority or governmental agency registered only to deduct tax under section 51 — Notification No. 29/2018–Central Tax (Rate), serial 14, in force from 1 January 2019.
• Renting of any immovable property other than a residential dwelling, by an unregistered person to a registered person, from 10 October 2024 — Notification No. 09/2024–Central Tax (Rate), as corrected by the official corrigendum dated 22 October 2024. From 16 January 2025, a recipient who has opted to pay tax under the composition levy is excluded — Notification No. 07/2025–Central Tax (Rate).
• Metal scrap falling under Chapters 72 to 81, supplied by an unregistered person to a registered person, from 10 October 2024 — Notification No. 06/2024–Central Tax (Rate), which amends Notification No. 04/2017–Central Tax (Rate).

Renting of a passenger motor vehicle (where the cost of fuel is included), by a person other than a body corporate, to a body corporate, is also a notified RCM service — serial 15 of Notification 13/2017–Central Tax (Rate), as substituted by Notification No. 29/2019–Central Tax (Rate). That entry still says RCM applies only if the supplier does not issue an invoice charging central tax at 6% (that is, 12% GST). From 22 September 2025, Notification 15/2025–Central Tax (Rate) changed several service rates that were 6% central tax to 9% central tax, including serial 10 item (i) of Notification No. 11/2017–Central Tax (Rate). No matching 2025 amendment to the 6% condition in the RCM entry was found. Check the current rate and the current text of serial 15 before you decide.

The full list is in Notification 13/2017–Central Tax (Rate) for intra-State services, Notification No. 10/2017–Integrated Tax (Rate) for the matching inter-State services, and Notification 04/2017–Central Tax (Rate) for intra-State goods, each as amended. Do not treat every service with the same name as automatically under RCM. Read the supplier, the recipient, and the other conditions in the current entry.

How you report the RCM liability in GSTR-3B

When you receive a notified RCM supply, you self-assess the tax and report it in Table 3.1(d) — Inward supplies (liable to reverse charge). Declare the taxable value and the IGST, CGST and SGST (or UTGST) on those supplies for the tax period.

This table is for inward supplies on which you pay tax under section 9(3) or 9(4) (or the IGST counterparts). It is not the same as Table 3.1.1, which is only for supplies notified under section 9(5) that are made through an electronic commerce operator (ECO). On those supplies, the ECO pays the tax, in cash. Do not put your ordinary RCM inward supplies in Table 3.1.1.

Import of goods is different again. The IGST paid at customs is usually claimed as ITC in Table 4(A)(1). It is not lumped into Table 3.1(d) with inward RCM services.

You must pay this tax in cash

You cannot use the ITC already sitting in your electronic credit ledger to pay RCM tax.

Section 49(4) allows the credit ledger to be used only to pay output tax. Section 2(82) defines “output tax” as the tax on supplies you make, and it expressly excludes tax payable on a reverse-charge basis. So RCM tax is paid from the electronic cash ledger. The official GST portal user guide states the same rule: ITC cannot be used to pay reverse-charge liabilities.

Self-invoice and payment voucher

If you receive a notified RCM supply from an unregistered person, you must issue a self-invoice under section 31(3)(f). From 1 November 2024, Rule 47A says you must issue that invoice within 30 days of receipt of the goods or services (Notification No. 20/2024–Central Tax, dated 8 October 2024).

When you make payment to the supplier for a supply on which you pay tax under RCM, you must also issue a payment voucher under section 31(3)(g). That applies whether the supplier is registered or unregistered.

The GST invoice generator can help you prepare an invoice with the usual GST particulars. It is not a GST-portal document, and it does not file your return or raise an official self-invoice for you. Check the particulars required by the Act and the rules before you use any draft.

How you claim RCM ITC

Paying the tax in cash does not, by itself, give you the same amount back as ITC. You may claim ITC only of the eligible portion, and only when the conditions in sections 16 and 17 are met. In particular:

• The tax has actually been paid.
• You have the required invoice or self-invoice, and the other documents, as applicable.
• The supply is used, or intended to be used, in the course or furtherance of your business.
• The credit is not blocked under section 17(5).
• If the supply is used partly for exempt supplies or non-business use, you must apply the reversals in Rules 42 and 43.
• The time limit in section 16(4) is met.

For RCM supplies received from an unregistered person, Circular No. 211/5/2024-GST dated 26 June 2024 clarifies that the financial year for section 16(4) is the financial year of your self-invoice, not some other date. If you issue the self-invoice late, interest can apply, and a penalty under section 122 may also be attracted.

Report the eligible ITC in the matching row of Table 4(A):

Once accepted, that eligible credit enters your electronic credit ledger. It then mixes with your other ITC and is used in the normal set-off order.

The RCM Liability / ITC Statement on the portal

From the tax period August 2024 (monthly filers) or the quarter July–September 2024 (quarterly filers), the GST portal has an RCM Liability/ITC Statement, introduced by the GSTN advisory of 23 August 2024. It tracks the RCM tax you show in Table 3.1(d) against the ITC you claim in Tables 4(A)(2) and 4(A)(3). Path: Services → Ledger → RCM Liability/ITC Statement.

A one-time opening-balance window was given in October and November 2024. Those dates have passed. When you file, follow any warning or check the portal shows if the ITC in Tables 4(A)(2) and 4(A)(3) is out of line with the tax paid in Table 3.1(d) and the balance in this statement. Reclaimed ITC that was earlier reversed in Table 4(B)(2) is taken in Table 4(A)(5), not again in 4(A)(2) or 4(A)(3).

After the credit is in your ledger

RCM ITC is not ring-fenced. Once it is in the electronic credit ledger, it is used like any other ITC.

The order is not a fixed path of “IGST, then CGST, then SGST.” Use IGST credit first (first against IGST, then leftover IGST credit against CGST and SGST or UTGST in any order and in any proportion). Use up the IGST credit before you use CGST, SGST or UTGST credit. CGST credit cannot pay SGST or UTGST, and SGST or UTGST credit cannot pay CGST. The full order, with a worked example, is in How to utilise IGST, CGST and SGST credit. That order comes from sections 49, 49A and 49B, Rule 88A, and Circular No. 98/17/2019-GST.

Remember: this set-off is only for output tax. It still cannot be used to pay a new RCM liability.

A worked example

These figures are only an illustration, so you can see the tables and the cash-then-credit steps. They are not from a live return.

You receive a notified intra-State RCM service of taxable value ₹1,00,000. The GST rate on that service is 18%.

1. In Table 3.1(d) you declare taxable value ₹1,00,000, CGST ₹9,000 and SGST ₹9,000.
2. You pay ₹18,000 from the electronic cash ledger. You cannot use ITC to pay this ₹18,000.
3. If the tax has been paid, you have the required invoice or self-invoice, the time limit in section 16(4) is met, and no part of the credit is blocked or to be reversed, you claim CGST ₹9,000 and SGST ₹9,000 in Table 4(A)(3). That ₹18,000 then sits in your electronic credit ledger and is used in the usual set-off order.

If only two-thirds of the service is used for taxable supplies, you do not keep the full ₹18,000 as credit. You paid ₹18,000 in cash; the eligible credit in this illustration is ₹12,000 (two-thirds of ₹18,000). The remaining ₹6,000 is ineligible or must be reversed under Rules 42 and 43, as applicable.

Points that often get missed

• Table 3.1(d) is inward RCM under section 9(3) or 9(4). Table 3.1.1 is ECO supplies under section 9(5). They are not the same.
• Import of services: liability in 3.1(d), eligible ITC in 4(A)(2). Other inward RCM: eligible ITC in 4(A)(3). Import of goods: typically 4(A)(1).
• A self-invoice for an unregistered supplier is due within 30 days of receipt, from 1 November 2024.
• For unregistered-supplier RCM, the section 16(4) clock follows the date of your self-invoice (Circular 211).
• Composition recipients are excluded from the immovable-property renting RCM entry from 16 January 2025.

The GST calculator helps you work out 5% or 18% tax on a value. The GST invoice generator helps you raise an invoice. Neither tool files GSTR-3B or works out RCM set-off for you. For the difference between CGST, SGST and IGST, see How to calculate CGST, SGST and IGST. For what belongs on a GST invoice, see How to create a GST invoice and a salary slip online. For the filing dates, see How to set GSTR-3B deadline reminders.