Reverse Charge (RCM) Entries in an Excel Ledger

Last updated: 27 June 2026 · For the GST 2.0 rates (Nil / 5% / 18% / 40%).

To record reverse charge (RCM) in an Excel ledger, log each RCM purchase with the supplier, taxable value and rate, calculate the GST you must self-pay, mark it "paid in cash" (not from ITC), and then record the matching ITC claim in a separate column. Under RCM the buyer — not the supplier — pays the GST, so your ledger must show both the liability you deposit and the credit you later claim.

Key takeaways

• Reverse charge flips who pays: the recipient deposits the GST instead of the supplier.
• RCM tax must be paid in cash — you cannot set it off using your Input Tax Credit ledger.
• You generally claim ITC on the RCM tax you paid (if otherwise eligible), so the net cost is often nil — but the cash still moves.
• Raise a self-invoice for RCM purchases from unregistered suppliers; track its number in Excel.
• Report RCM in GSTR-3B: liability in Table 3.1(d), and the ITC in Table 4.
• Common RCM triggers: goods transport (GTA), legal services from advocates, and specified notified supplies.

Fact box. Under reverse charge mechanism (RCM), the liability to pay GST shifts from the supplier to the recipient. The recipient must pay this tax in cash (not from ITC) and, where eligible, can then claim it back as Input Tax Credit. (Source: CGST Act, Section 9(3)/9(4); CBIC.)

What is reverse charge and when does it apply?

Normally the supplier collects GST and pays it. Under RCM the buyer pays it directly to the government. It applies in three broad situations:

1. Notified supplies under Section 9(3) — e.g. goods transport agency (GTA) services, legal services from an advocate, director's services to a company.
2. Purchases from unregistered suppliers under Section 9(4), for notified categories.
3. Specified imports of services.

In each case you, the recipient, work out the GST and deposit it — then usually reclaim it as ITC.

How do I lay out an RCM ledger in Excel?

Keep RCM purchases either in their own sheet or flagged in the purchase register. Useful columns:

Split the RCM tax into IGST or CGST+SGST the same way as a normal supply, using place of supply.

How do I record the tax paid and the ITC claim?

This is where RCM differs from an ordinary purchase: the tax moves out in cash first, then comes back as credit.

RCM tax (liability)  =Taxable * Rate / 100
Paid in cash?        Yes   (cannot use ITC ledger)
ITC claim            =IF(ITC_eligible="Yes", RCM_tax, 0)
Net cost             =RCM_tax - ITC_claim

When ITC is eligible the net cost is often zero, but you have still paid cash this month and claimed credit — both legs must appear, because they hit different tables of GSTR-3B.

Fact box. RCM liability is reported in GSTR-3B Table 3.1(d) (inward supplies liable to reverse charge) and the corresponding credit, where eligible, in Table 4 (ITC). The tax in 3.1(d) must be discharged in cash. (Source: GSTN GSTR-3B format.)

When must I raise a self-invoice?

When you buy from an unregistered supplier and RCM applies, you raise a self-invoice because there is no supplier tax invoice. Track the self-invoice number in your ledger so it ties to the RCM tax and the ITC claim. You may also need to issue a payment voucher. Keep the numbering continuous and separate from your sales invoices.

How does RCM flow into GSTR-3B?

1. Total your RCM tax for the month by head (IGST, CGST, SGST) with SUMIFS.
2. Enter it as liability in Table 3.1(d) and pay it in cash.
3. Total the eligible RCM ITC and claim it in Table 4.
4. Reconcile: liability paid in cash, credit claimed — net usually nil, but both recorded.

How Ankeshan helps: Ankeshan flags RCM purchases, computes the self-pay tax, generates the self-invoice number, and lines up the matching ITC claim so your Table 3.1(d) and Table 4 figures agree — inside Excel. It's launching soon; join the waitlist.

Frequently asked questions

What is reverse charge in GST? A mechanism where the buyer, not the supplier, pays the GST to the government — for notified supplies, certain unregistered-supplier purchases, and some imported services.

Can I pay RCM tax using Input Tax Credit? No. RCM liability must be paid in cash; you cannot set it off against your ITC ledger. You can, however, claim the ITC afterwards if eligible.

Do I need a self-invoice for RCM? Yes, when the supplier is unregistered and RCM applies, because there is no supplier tax invoice. Record the self-invoice number against the entry.

Where is RCM reported in GSTR-3B? The liability goes in Table 3.1(d); the corresponding eligible credit goes in Table 4 (ITC).

Can I claim ITC on RCM tax? Generally yes, if the input is otherwise eligible, in which case the net cost is often nil — but the cash payment and the credit are recorded separately.

Sources

• CGST Act, Sections 9(3) and 9(4) (reverse charge); self-invoice rules — cbic-gst.gov.in.
• GSTN: GSTR-3B Table 3.1(d) and Table 4 — gst.gov.in.

General information, not professional advice. Verify on the official portal for your case. Reviewed by a Chartered Accountant; last updated 27 June 2026.

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