How to File RCM in GST Return?

Wondering how to show RCM in GSTR 1? Under the Goods and Services Tax (GST) regime, Reverse Charge Mechanism (RCM) applies in certain cases where the recipient, instead of the supplier, is liable to pay the tax to the government.

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How to File Reverse Charge in GSTR1?

Here's how you can file RCM in your GST return:

• First, identify the transactions on which RCM applies. RCM typically applies to specific goods and services as notified by the government. For instance, certain services provided by unregistered persons to a registered person attract RCM.

• Maintain accurate records of all transactions subject to RCM. Ensure that invoices received from suppliers clearly indicate that RCM is applicable.

• In your monthly GSTR-3B return, report the RCM liability in the relevant sections. The RCM liability needs to be segregated from the regular tax liability. Input tax credit (ITC) can be claimed against the RCM liability, subject to certain conditions.

• If you're a supplier who's providing goods or services under RCM, you need to report these transactions in your GSTR-1 return. Mention that the supply is under RCM and provide details of the recipient.

• Pay the tax due under RCM along with the regular tax liability by the due date specified for filing GSTR-3B.

• At the end of the financial year, file the annual return GSTR-9, which summarizes the details of all transactions made during the year, including those under RCM.

• Ensure that all necessary documentation, such as invoices and payment vouchers, is maintained properly to support the RCM transactions reported in your GST returns.

Regularly review your RCM transactions and reconcile them with your financial records to ensure accuracy in reporting. This is all about how to show RCM in GSTR 1.

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Before learning

how to file RCM in GSTR 1, let me first tell you what is RCM.

As per my knowledge, the amount of GST is known as the "reverse charge" in GST. It is the sum of money that a consumer must pay to the government directly rather than via the supplier in certain circumstances where the government has designated certain goods or services to be subject to the reverse charge mechanism. Now, let’s check out the steps involved in filing RCM.

• You should

  visit the official GST portal (

  https://www.gst.gov.in/

  ).

• Log in using your credentials (GSTIN, username, and password).

• Once you are logged in, go to the 'Services' tab and select 'Returns.'

• Select the relevant GST return form based on your registration type and period (monthly or quarterly).

• Fill in the details of your outward supplies.

• In the GSTR-3B return form, you are required to report the reverse charge liability in Table 4.

• Mention your total tax liability, including the tax payable under reverse charge.

• You can pay your tax using the available modes.

• After payment, you can submit the return on the GST portal.

• If you are a regular taxpayer, GSTR-3B and GSTR-1 need to be filed monthly.

This is the process for

RCM filing in GST

.

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Having been in the finance industry for the past 16 years, I know considerably well about GST ns return filings. The GST Reverse Charge Method is a mechanism that reverses the typical cycle of tax payment. The recipient of the products will typically pay the supplier the cost of the goods and any applicable taxes, who will then pay the government the GST. In a reverse charge arrangement, the recipient pays the provider an amount before GST and then pays the GST to the government. RCM is a challenging idea that only functions in a few circumstances. Reverse Charge Mechanism (RCM) is the full name for this type of GST payment method, where the supplier is required to discharge the tax responsibilities rather than the recipient. I will tell you exactly how to file RCM in GST return in a very simple and understandable manner. So please keep reading.

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What is the meaning of RCM return in GST?

The RCM, or Reverse Charge Process, is a GST mechanism that switches the roles of the provider and the recipient in terms of paying the GST. In the conventional system, the receiver pays the supplier, who then pays the government, the GST. However, in the case of Reverse Charge, the receiver pays the government the GST directly, as opposed to the supplier. This mechanism is applicable to particular circumstances, goods, and services that the government has identified. Reverse Charge in GST refers to the percentage of GST that the receiver must pay to the government directly rather than through the provider because, in some circumstances, the government has designated certain goods or services as falling underneath the Reverse Charge Mechanism.

How to Show RCM in GST Return?

You can presently declare inbound and outward supplies made under RCM in Forms GSTR-1 and GSTR-3B.

Table 4B of GSTR-1 GSTR-3B Table 3.1 (d)

The supplier must fill out GST RET-1 to disclose the total sales subject to RCM. He must record external RCM supply in accordance with GST RET-1 Table 3D. Sales subject to RCM do not require to be reported in GST RET-2 and GST RET-3. Reverse charge purchases must be reported invoice-by-invoice in GST ANX-1 by the recipient. He must mention this in GST ANX-1 Table 3H. 

The inbound RCM supplies that the recipient reports will automatically be added to GST ANX-1's Table 3B (details of inbound supplies generating reverse charge). While submitting his GST RET-1/PMT-08/RET-2/RET-3, if appropriate, the recipient must release his obligation through an electronic cash ledger. The recipient's GST RET-1 will automatically populate Table 4A with the credit on RCM purchases.

This is the process of how to file RCM in GST return.