GST Reverse charge Accounting
This query is : Resolved
23 June 2025
I would like to know if I am (Suppose I am also a registered taxpayer) having inward supply of Security services or any other services which are taxable under reverse charge mechanism, how will I enter the journal in tally?
12 August 2025
Sure! When you receive a service under **Reverse Charge Mechanism (RCM)** as a registered GST taxpayer, you are required to:
* **Record the expense/service received**
* **Pay GST on reverse charge basis** (i.e., you are the recipient and also the person liable to pay GST)
* **Claim Input Tax Credit (ITC)** on the GST paid (if eligible)
---
### Sample journal entries in Tally for inward supply under RCM (e.g., Security services):
---
#### 1. **On receipt of service invoice without GST (service provider not charging GST):**
| Particulars | Debit (₹) | Credit (₹) |
| ------------------------------------------ | ------------ | ---------- |
| Security Expense (or relevant expense) | XXXX | |
| GST Input (CGST) | GST Amount/2 | |
| GST Input (SGST) | GST Amount/2 | |
| To Security Service Provider (or Supplier) | | XXXX |
*(Assuming GST is 18%, split equally between CGST and SGST)*
---
#### 2. **On payment of GST under RCM (liability created):**
| Particulars | Debit (₹) | Credit (₹) |
| ------------------------- | ------------ | ------------ |
| GST Input (CGST) | | GST Amount/2 |
| GST Input (SGST) | | GST Amount/2 |
| To GST Payable (RCM CGST) | GST Amount/2 | |
| To GST Payable (RCM SGST) | GST Amount/2 | |
*This entry records GST liability on reverse charge, which you pay to government.*
---
#### 3. **When you pay GST to government:**
| Particulars | Debit (₹) | Credit (₹) |
| ---------------------- | ------------ | ---------- |
| GST Payable (RCM CGST) | GST Amount/2 | |
| GST Payable (RCM SGST) | GST Amount/2 | |
| To Bank / Cash | | GST Amount |
---
### Important notes:
* **You must pay the GST liability on RCM on or before the due date.**
* **Input tax credit can be claimed on the GST paid under RCM, subject to eligibility and conditions.**
* Tally GST ledgers for RCM must be properly created to track these transactions.
---
If you want, I can prepare a step-by-step Tally voucher entry guide or template for this. Would that help?
* **Record the expense/service received**
* **Pay GST on reverse charge basis** (i.e., you are the recipient and also the person liable to pay GST)
* **Claim Input Tax Credit (ITC)** on the GST paid (if eligible)
---
### Sample journal entries in Tally for inward supply under RCM (e.g., Security services):
---
#### 1. **On receipt of service invoice without GST (service provider not charging GST):**
| Particulars | Debit (₹) | Credit (₹) |
| ------------------------------------------ | ------------ | ---------- |
| Security Expense (or relevant expense) | XXXX | |
| GST Input (CGST) | GST Amount/2 | |
| GST Input (SGST) | GST Amount/2 | |
| To Security Service Provider (or Supplier) | | XXXX |
*(Assuming GST is 18%, split equally between CGST and SGST)*
---
#### 2. **On payment of GST under RCM (liability created):**
| Particulars | Debit (₹) | Credit (₹) |
| ------------------------- | ------------ | ------------ |
| GST Input (CGST) | | GST Amount/2 |
| GST Input (SGST) | | GST Amount/2 |
| To GST Payable (RCM CGST) | GST Amount/2 | |
| To GST Payable (RCM SGST) | GST Amount/2 | |
*This entry records GST liability on reverse charge, which you pay to government.*
---
#### 3. **When you pay GST to government:**
| Particulars | Debit (₹) | Credit (₹) |
| ---------------------- | ------------ | ---------- |
| GST Payable (RCM CGST) | GST Amount/2 | |
| GST Payable (RCM SGST) | GST Amount/2 | |
| To Bank / Cash | | GST Amount |
---
### Important notes:
* **You must pay the GST liability on RCM on or before the due date.**
* **Input tax credit can be claimed on the GST paid under RCM, subject to eligibility and conditions.**
* Tally GST ledgers for RCM must be properly created to track these transactions.
---
If you want, I can prepare a step-by-step Tally voucher entry guide or template for this. Would that help?
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