Reverse Charge Mechanism (RCM) — Complete list of services & goods 2026

 🔄 A Comprehensive Guide for Businesses, Accountants & GST Professionals 

Under the normal GST mechanism, the supplier is responsible for charging and depositing GST. However, in certain specified cases, the liability shifts from the supplier to the recipient. This is known as the Reverse Charge Mechanism (RCM).

Understanding RCM is essential because non-compliance can lead to:

      ⚠️ Interest and penalties
            ⚠️ Denial of Input Tax Credit (ITC)
      ⚠️ Notices from GST authorities
            ⚠️ Incorrect GST returns

Let's understand the complete list of goods and services covered under RCM in 2026. 🚀

---

 📌 What is Reverse Charge Mechanism (RCM)? 

Under RCM, the recipient of goods or services pays GST directly to the government instead of the supplier.

The recipient must:

      ✔ Pay GST in cash

            ✔ Report the transaction in GSTR-3B

      ✔ Issue self-invoice where applicable

            ✔ Claim ITC (subject to conditions) after payment of tax 

---

📋 Types of Reverse Charge under GST

There are mainly three categories:

1️⃣ Supplies notified under Section 9(3)

Specific goods and services notified by the Government.

---

2️⃣ Import of Services

Services received from foreign suppliers are generally covered under RCM. 

---

3️⃣ E-Commerce Operator Liability

Certain services supplied through e-commerce operators are covered under special provisions. 

---

 🚚 Complete List of Services Covered under RCM in 2026 

1. Goods Transport Agency (GTA) Services

Supplier:

1. Goods Transport Agency
   

Recipient Liable:

• Factory
• Company
• Registered person
• Partnership firm
• Society
• Co-operative society

GST Rate:

1. 5%

Applicable where GTA has not opted for forward charge. 

---

2. Legal Services

Supplier:

• Individual Advocate
• Senior Advocate
• Law Firm

Recipient:

1. Business Entity

GST Rate:

1. 18%

RCM applies irrespective of whether the advocate is GST registered. 

---

3. Services by Arbitral Tribunal

Supplier:

1. Arbitral Tribunal

Recipient:

1. Business Entity

GST Rate:

1. 18% 

---

4. Sponsorship Services

Supplier:

1. Any Person

Recipient:

1. Body Corporate or Partnership Firm

GST Rate:

1. 18% 

---

5. Director Services

Supplier:

1. Director

Recipient:

1. Company or Body Corporate

GST Rate:

1. 18%

⚠️ Director remuneration treated as salary under employer-employee relationship is outside GST. Professional or contractual services are covered under RCM. 

---

6. Insurance Agent Services

Supplier:

1. Insurance Agent

Recipient:

1. Insurance Company

GST Rate:

1. 18% 

---

7. Recovery Agent Services

Supplier:

1. Recovery Agent

Recipient:

1. Banks, Financial Institutions, NBFCs

GST Rate:

1. 18% 

---

8. Security Services

Supplier:

1. Non-corporate Security Agency

Recipient:

1. Registered Person

GST Rate:

1. 18% 

---

9. Renting of Motor Vehicle

Supplier:

1. Non-corporate Service Provider

Recipient:

1. Body Corporate

GST Rate:

1. 5%

Applicable subject to prescribed conditions. 

---

10. Government Services

Services supplied by:

• Central Government
• State Government
• Local Authorities

to business entities are covered under RCM, except specified exclusions. 

---

11. Import of Services

When services are received from foreign entities:

      🌍 Foreign Consultant

            🌍 Software Services

      🌍 Marketing Services

            🌍 SaaS Subscription

Recipient:

1. Indian Entity

Tax:

1. IGST under RCM

Import of services is one of the most common RCM transactions. 

---

📦 Goods Covered under RCM

Certain goods are notified under Section 9(3).

Some major categories include:

      🥜 Cashew Nuts (Unprocessed)

            🍃 Tobacco Leaves

      🪨 Metal Scrap (specified cases)

            🧵 Silk Yarn

      📰 Used Vehicles and Seized Goods (certain government disposals)

            📄 Lottery Supplies

These categories are subject to periodic notifications and amendments. 

---

🌐 E-Commerce Services Covered under Special Provisions

GST liability may be discharged by e-commerce operators for services such as:

      🚖 Passenger transport

            🏠 Accommodation services

      🍽 Restaurant services

            🧹 Housekeeping services

where prescribed conditions are satisfied. 

---

📑 Time of Supply under RCM

For Goods

Earlier of:

      ✔ Date of receipt of goods

      ✔ Date of payment

      ✔ 30 days from invoice date

For Services

Earlier of:

      ✔ Date of payment

      ✔ 60 days from invoice date

      ✔ Date of book entry where applicable 

---

 🧾 Self-Invoice Requirement 

Where applicable, the recipient may need to issue:

      📄 Self-Invoice

                  and

      📄 Payment Voucher

for RCM transactions. 

---

 💰 Can ITC Be Claimed on RCM? 

Yes ✅

Conditions:

      ✔ Goods/services received

            ✔ Used for business purposes

      ✔ GST paid under RCM in cash

Once paid, Input Tax Credit can be claimed. However, ITC cannot be used to discharge RCM liability itself. 

---

 🚨 Common Mistakes Businesses Make 

      ❌ Missing import of services transactions

            ❌ Ignoring director remuneration implications

      ❌ Not paying RCM in cash

            ❌ Failure to raise self-invoices

      ❌ Incorrect GSTR-3B reporting

            ❌ Claiming ITC before payment of tax

These errors often result in notices and interest liabilities.

---

 📊 RCM Compliance Checklist 

      ✅ Identify RCM transactions

            ✅ Raise self-invoice where required

      ✅ Pay GST in cash

            ✅ Report correctly in GSTR-3B

      ✅ Maintain supporting documents

            ✅ Claim ITC after payment

---

 🎯 Final Thoughts 

Reverse Charge Mechanism is one of the most sensitive areas under GST compliance. Businesses must regularly review expenses and vendor transactions to identify RCM applicability.

Understanding:

      📋 Services covered under RCM

            📦 Goods notified under RCM

      🌍 Import of services

            📑 Self-invoicing requirements

      💰 ITC eligibility

helps businesses remain compliant and avoid costly penalties.

Proper accounting and monthly GST reviews can significantly reduce RCM-related risks.

---

📲 Join our WhatsApp Channel for regular GST, Income Tax & Compliance insights:
https://whatsapp.com/channel/0029VaAOrtiFCCoQlhtGIx2o

📺 Explore more informational content on our YouTube Channel:
https://www.youtube.com/@taxajca

📞 Call or WhatsApp for professional assistance:
+91 8802912345, connect@taxaj.com

Stay compliant. Pay RCM correctly. Maximize ITC efficiently. 📊

• Related Articles

• GST: Self Invoicing Under RCM ( Reverse Charge Mechanism)

  In GST, Section 9 of the CGST Act 2017– related to levy and collection, There are 2 types of charges under GST  (1) Forward Charges  (2) Reverse Charges Under reverse charge, there are two type of payments i.e.  Taxable supplies provided by register ...

• GST on Director Sitting Fees vs Salary — RCM clarification

  One of the most debated issues under GST has been the applicability of tax on director remuneration, especially distinguishing between salary paid to directors and director sitting fees. Businesses often face confusion regarding whether GST should be ...

• How to check the correct Input Tax Credit Rate?

  Input Tax Credit – ITC One of the fundamental features of GST is the seamless flow of input credit across the chain (from the manufacture of goods till it is consumed) and across the country. Latest Update 1st February 2022 Budget 2022 updates- 1. ...

• What Is Input Tax Credit In GST with Example

  One of the fundamental features of GST is the seamless flow of input credit across the chain (from the manufacture of goods till it is consumed) and across the country. 1st February 2022 Budget 2022 updates- 1. ITC cannot be claimed if it is ...

• How to Utilise & Adjust Input Tax Credit in GST?

  Input Tax Credit (ITC) under GST What Is Input Tax Credit (ITC). Input Tax Credit refers to the tax already paid by a person at time  of purchase of goods & services and which is available as deduction from tax payable. For e.g- A trader purchases ...