Reverse Charge Mechanism (RCM)

Tax Glossary Definition

Reverse Charge Mechanism (RCM)

Under GST, the Reverse Charge Mechanism requires the recipient of goods or services, rather than the supplier, to pay the applicable tax. This is typically applicable in cases like import of services, specified categories of goods or services, or supplies from unregistered suppliers.

Example: When a business imports consulting services from a foreign vendor, the recipient is responsible for paying the GST under RCM

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