The Reverse Charge Mechanism (RCM) applies to a wide range of services notified by the government. Understanding which services are covered under RCM is essential for every business. This article provides a comprehensive and updated list of services notified for RCM.
Legal Framework
RCM on services is governed by Section 9(3) of the CGST Act. The key notification is Notification No. 13/2017 dated 28.06.2017, which has been amended multiple times.
Complete List of Services Under RCM
1. Goods Transport Agency (GTA) Services
Service: Transportation of goods by road
Supplier: Any GTA
Recipient Liable: GST Registered Person / Registered Factory / Registered Society / Co-operative Society / Casual Taxable Person / Body Corporate / Partnership firm / LLP
Exceptions:
- Recipient is Government Department / Local Authority / Government Agency registered under GST only for TDS purpose
- Supplier charges tax under forward charge and mentions prescribed declaration on invoice
Rate: 5% (without ITC) or 12% (with ITC)
2. Legal Services by Advocates
Service: Advice, consultancy, or assistance in any branch of law, including representational services
Supplier: Individual advocate, senior advocate, or law firm (including LLPs)
Recipient Liable: Any business entity located in taxable territory
Rate: 18%
3. Services of Arbitral Tribunal
Service: Services by an arbitral tribunal
Supplier: Arbitral Tribunal
Recipient Liable: Any business entity
Rate: 18%
4. Sponsorship Services
Service: Sponsorship services
Supplier: Any person (other than a body corporate)
Recipient Liable: Any body corporate / partnership firm
Rate: 18%
5. Services by Government / Local Authority
Service: Services provided by Central/State Government, Union Territory, or Local Authority
Recipient Liable: Any business entity
Exceptions:
- Renting of immovable property
- Services by Department of Post and Indian Railways
- Services for aircraft and vessel
- Transport of goods or passengers
Rate: As applicable
6. Renting of Immovable Property by Government
Service: Renting of immovable property
Supplier: Government / Local Authority / Government Agency
Recipient Liable: GST Registered Person
Rate: 18%
7. Renting of Residential Dwelling
Service: Renting of residential dwelling
Supplier: Any person
Recipient Liable: GST Registered Person
Rate: 18%
8. Renting of Immovable Property (Other Than Residential)
Service: Renting of any immovable property other than residential dwelling
Supplier: Any person
Recipient Liable: GST Registered Person (except composition dealer)
Rate: 18%
9. Services by Directors
Service: Services by a director of a company / body corporate to the said company / body corporate
Supplier: Director
Recipient Liable: The company / body corporate
Rate: 18%
10. Services by Insurance Agents
Service: Services by an insurance agent
Supplier: Insurance agent
Recipient Liable: Person carrying on insurance business
Rate: 18%
11. Services by Recovery Agents
Service: Services supplied by a recovery agent
Supplier: Recovery agent
Recipient Liable: Banking company / financial institution / NBFC
Rate: 18%
12. Services by Music Composers / Photographers / Artists
Service: Services by transfer / permitting the use of copyright of original dramatic, musical, or artistic works
Supplier: Music composer / photographer / artist
Recipient Liable: Music company, producer, or the like
Rate: 18%
13. Services by Authors
Service: Services by transfer / permitting the use of copyright of original literary works
Supplier: Author
Recipient Liable: Publisher
Exception: Author charges tax under forward charge and mentions prescribed declaration on invoice
Rate: 18%
14. Services by Members of Overseeing Committee
Service: Services by members of Overseeing Committee
Supplier: Member of Overseeing Committee
Recipient Liable: Recipient
Rate: As applicable
Key Changes and Amendments
The RCM list has been amended multiple times. Key changes include:
- January 2025: Amendments to serial number 5AB
- April 2025: Certain amendments effective from 1 April 2025
RCM Compliance Requirements
Step 1: Identify RCM Services — Determine whether the service falls under RCM.
Step 2: Self-Invoice — Issue a self-invoice.
Step 3: Pay Tax — Pay GST on the RCM supply.
Step 4: Report in GSTR-3B — Report the RCM liability.
Step 5: Claim ITC — Claim ITC on the RCM payment.
Common Errors
- Not identifying RCM services
- Not issuing self-invoice
- Wrong tax rate application
- Not claiming ITC on RCM
RCM applies to a wide range of services, from legal services to GTA services. Businesses must identify RCM services, issue self-invoices, pay tax on time, and claim ITC properly.
Need help with RCM compliance? Our GST experts provide end-to-end advisory and support.
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