{"id":908,"date":"2024-10-24T17:13:17","date_gmt":"2024-10-24T11:43:17","guid":{"rendered":"https:\/\/www.caclubindia.com\/guide\/?p=908"},"modified":"2025-06-26T15:56:43","modified_gmt":"2025-06-26T10:26:43","slug":"rcm-under-gst","status":"publish","type":"post","link":"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/","title":{"rendered":"RCM Under GST: How To Record Entries In Tally?"},"content":{"rendered":"\n<p>RCM Under GST is a system where the tax liability shifts from the supplier to the recipient of services.<\/p>\n\n\n\n<p>The buyer pays the GST directly to the government and can claim Input Tax Credit (ITC) if eligible.<\/p>\n\n\n\n<p>Generally, the supplier of goods or services is liable to pay the GST. However, in some cases like imports and other notified supplies , the liability may be cast on the recipient under the reverse charge mechanism.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\r\n<div class=\"ez-toc-title-container\">\r\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\r\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\r\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Process_To_Record_RCM_Under_GST_Entry_In_Tally\" >Process To Record RCM Under GST Entry In Tally<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#First_Entry_To_Be_Made_When_An_Invoice_Issued\" >First Entry To Be Made When An Invoice Issued<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Create_a_ledger\" >Create a ledger<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Journal_Entry\" >Journal Entry<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Second_Step_Entries_for_Increase_in_Tax_Liability_Input_Tax_Credit_for_RCM\" >Second Step Entries for Increase in Tax Liability &amp; Input Tax Credit for RCM<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Create_Journal_used_for_Increase_in_Tax_Liability_Input_Tax_Credit_for_RCM\" >Create Journal used for Increase in Tax Liability &amp; Input Tax Credit for RCM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Journal_Entry-2\" >Journal Entry<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#How_to_Record_this_Ledger_Entries\" >How to Record this Ledger Entries<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#Third_Step_To_Make_Payment\" >Third Step To Make Payment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/nav><\/div>\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Process_To_Record_RCM_Under_GST_Entry_In_Tally\"><\/span>Process To Record RCM Under GST Entry In Tally<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The steps to record <strong><a href=\"https:\/\/www.caclubindia.com\/guide\/rcm-on-commercial-rent\/\">RCM under GST<\/a><\/strong> in tally are :<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Enable GST and RCM in Tally<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Create a Supplier Ledger<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Create GST Tax Ledgers (CGST, SGST, IGST):<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Record Purchase Entries<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Create a payment entry for the RCM liability.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Claim Input Tax Credit on RCM<\/li>\n<\/ul>\n\n\n\n<p><strong>For Example:<\/strong> Vijay pays property rent to ABC Enterprises amounting Rs 20,000. ABC Enterprises is an unregistered taxpayer and gives an invoice of rent. Now lets check how to make a entry on this.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"First_Entry_To_Be_Made_When_An_Invoice_Issued\"><\/span>First Entry To Be Made When An Invoice Issued<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Create_a_ledger\"><\/span>Create a ledger<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Rent Paid (RCM) a\/c<\/strong><\/td><td><strong>ABC Enterprises a\/c<\/strong><\/td><\/tr><tr><td>Under &#8211; Indirect Expenses<br>GST Applicability &#8211; Applicable<br>Taxability Type &#8211; Taxable<br>GST Rate &#8211; 18%<br>Applicable for Reverse Charge &#8211; Yes<br>Eligible for ITC &#8211; Yes<br>Type of supply &#8211; Services<\/td><td>Under &#8211; Sundry Creditor (Current liabilities)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Note : <\/strong>If the option &#8220;<strong>applicable for Reverse Charge<\/strong>&#8221; and &#8220;<strong>eligible for ITC<\/strong>&#8221; not showing then press F12 and &#8220;Yes&#8221; the option &#8220;Enable Reverse Charge&#8221; Calculation and &#8220;Eligible for Input Tax Credit&#8221;.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Journal_Entry\"><\/span>Journal Entry<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Rent Paid\u2026&#8230;&#8230;Dr 20,000<br>             To ABC Enterprises\u2026&#8230;&#8230;Cr 20,000<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Second_Step_Entries_for_Increase_in_Tax_Liability_Input_Tax_Credit_for_RCM\"><\/span>Second Step Entries for Increase in Tax Liability &amp; Input Tax Credit for RCM<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Create_Journal_used_for_Increase_in_Tax_Liability_Input_Tax_Credit_for_RCM\"><\/span>Create Journal used for Increase in Tax Liability &amp; Input Tax Credit for RCM<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Go to Journal voucher and select stat adjustment<\/li>\n\n\n\n<li>Type of duty \/ tax: GST<\/li>\n\n\n\n<li>Nature of adjustment: Increase in Tax Liability &amp; Input Tax Credit.<\/li>\n\n\n\n<li>Additional nature of adjustment: Purchase from unregistered dealer.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Journal_Entry-2\"><\/span>Journal Entry<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>CGST on Input RCM\u2026&#8230;&#8230;Dr      1800<br>SGST on Input RCM\u2026&#8230;&#8230;Dr       1800<br>            To CGST Liability RCM\u2026&#8230;&#8230;Cr              1800<br>            To SGST Liability RCM\u2026&#8230;&#8230;Cr              1800<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Record_this_Ledger_Entries\"><\/span>How to Record this Ledger Entries<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">CGST on Input RCM<\/span><\/strong><br>Under &#8211; Duties &amp; Taxes (<em>Current Liabilities<\/em>)<br>Type of Duty \/ Tax &#8211; GST<br>Tax Type &#8211; CGST<br>Percentage of calculation &#8211; 9% (<em>By entering Alt+A<\/em>)<\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">SGST on Input RCM<\/span><\/strong><br>Under &#8211; Duties &amp; Taxes (<em>Current Liabilities<\/em>)<br>Type of Duty \/ Tax &#8211; GST<br>Tax Type &#8211; SGST<br>Percentage of calculation &#8211; 9% (<em>by entering Alt+A<\/em>)<\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">CGST liability RCM<\/span><\/strong><br>Under &#8211; Duties &amp; Taxes (<em>Current Liabilities<\/em>)<br>Type of Duty \/ Tax &#8211; Others<\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">SGST liability RCM<\/span><\/strong><br>Under &#8211; Duties &amp; Taxes (<em>Current Liabilities<\/em>)<br>Type of Duty \/ Tax &#8211; Others<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Third_Step_To_Make_Payment\"><\/span>Third Step To Make Payment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Go to Payment Voucher.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Click on Stat Adjustment for GST and TDS.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Select payment under Reverse Charge in GST Nature of Payment.<\/li>\n<\/ul>\n\n\n\n<p><strong>Then make the entry &#8211;<\/strong><\/p>\n\n\n\n<p>CGST Liability RCM\u2026&#8230;&#8230;Dr      1800<br>SGST Liability RCM\u2026&#8230;&#8230;Dr      1800<br>                    To Bank Account\u2026&#8230;&#8230;Cr              3600<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1729769923042\"><strong class=\"schema-faq-question\">When RCM is applicable?<\/strong> <p class=\"schema-faq-answer\">RCM applies when purchase made from unregistered dealers or certain specified goods and services.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1729769930851\"><strong class=\"schema-faq-question\">Can I claim Input Tax Credit (ITC) on RCM?<\/strong> <p class=\"schema-faq-answer\">Yes, you can claim ITC on GST paid under RCM if you are eligible.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1729769949598\"><strong class=\"schema-faq-question\">How do I report RCM in GST returns?<\/strong> <p class=\"schema-faq-answer\">RCM amount to be in GSTR-3B under taxable inward supplies subject to RCM.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1729769959743\"><strong class=\"schema-faq-question\">What happens if I don\u2019t pay RCM?<\/strong> <p class=\"schema-faq-answer\">Failure to pay RCM may result in penalties and interest.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>RCM Under GST is a system where the tax liability shifts from the supplier to the recipient of services. The [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":909,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[6],"tags":[],"class_list":["post-908","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>RCM Under GST: How To Record Entries In Tally? - Tax Guide<\/title>\r\n<meta name=\"description\" content=\"RCM under GST applies to certain categories where the buyer has to pay GST directly to the government and then can claim ITC if eligible.\" \/>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.caclubindia.com\/guide\/rcm-under-gst\/\" \/>\r\n<meta property=\"og:locale\" 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