Does a supplier with no GST registration always trigger RCM?

No. Buying from an unregistered supplier is not reverse charge by itself. Since 1 February 2019, section 9(4) applies only to supplies the government has notified, for example certain purchases by a real estate promoter. Example: a shop buying stationery from an unregistered vendor pays no RCM. The same shop renting its premises from an unregistered landlord does.

Is a director's salary under RCM?

No. RCM applies to fees a director earns in that capacity, such as sitting fees or commission. Salary paid to a whole-time director under an employment contract is not covered. Example: ₹2,00,000 of sitting fees to an independent director attracts 18% RCM = ₹36,000. A ₹2,00,000 monthly salary to the managing director does not.

Does RCM on rent apply to an office I rent for my business from a registered landlord?

No. When the landlord is registered, they charge GST on their invoice and you pay it to them like any other supplier. RCM applies to commercial rent only when the landlord is unregistered. Example: a ₹50,000 rent invoice from a registered landlord carries ₹9,000 GST on it, and you pay ₹59,000 in all.

What if my GTA's invoice already has GST on it?

Then check whether the GTA has opted for forward charge and said so on the invoice. If it has, you pay the GST on the invoice and there is no RCM. If it has not, ask the GTA to correct the invoice, because paying GST to them and again under RCM would double the tax. Example: a ₹20,000 freight bill with ₹1,000 GST on it and the forward-charge declaration needs no RCM from you.

Reverse Charge (RCM) in GST: Who Pays and What to File

Reverse charge is the part of GST where the buyer pays the tax. It catches small businesses out because nothing on the supplier's bill tells you it applies: the bill has no GST on it, and the duty to pay it quietly falls on you.

This post goes through who pays, the services small businesses meet most, how the tax is worked out, and where it goes in your return. The RCM GST calculator does the sum for any entry on the list.

This is based on Notification 13/2017-Central Tax (Rate) as consolidated by ICAI, which includes amendments up to Notification 7/2025 (16 January 2025). The government can add or remove entries, so check the current notification before you file. This is not legal advice.

The short version

Under RCM you pay the GST, not the supplier. The supplier invoices without GST. You pay them the agreed amount, pay the GST to the government yourself, and claim it back as input tax credit (ITC) if you are eligible.
It applies only to notified supplies. Services are listed in Notification 13/2017. Imports of services come under the IGST Act. Some goods, and some purchases from unregistered suppliers, are also notified.
You must pay it in cash. You cannot use your ITC to pay RCM.
You report it in GSTR-3B Table 3.1(d) and claim the ITC in Table 4(A)(3), or 4(A)(2) for an import of services.

The services small businesses meet most

You buy	From	You pay RCM if
Freight by road	A goods transport agency (GTA)	You are a registered person, factory, society, co-operative society, body corporate, partnership firm or casual taxable person, and the GTA has not opted to charge GST itself
Commercial rent	An unregistered landlord	You are registered and not under composition (from 10 October 2024)
Legal services	An advocate or a law firm	You are a business entity
Security personnel	Anyone other than a body corporate	You are registered and not under composition
Director's fees	A director	You are the company
Sponsorship	Anyone other than a body corporate	You are a body corporate or partnership firm
Software, consulting or other services	A supplier outside India	You are in India, and not a non-taxable online recipient

The calculator's page lists every entry in the notification, with the supplier and the recipient for each.

How the tax is worked out

The tax is the rate on the value of the supply. There is no GST inside the amount you agreed, so there is nothing to back out.

Office rent of ₹50,000 a month from an unregistered landlord, at 18%. The RCM tax is ₹50,000 × 18% = ₹9,000, split as ₹4,500 CGST and ₹4,500 SGST if the landlord is in your state. You pay the landlord ₹50,000 and the government ₹9,000. If you can claim ITC, the ₹9,000 comes back, so the net cost stays ₹50,000.

₹20,000 of freight from a GTA, at 5%. The tax is ₹1,000: ₹500 CGST and ₹500 SGST. A GTA's rate is 5%, with no ITC for the GTA, or 18% with ITC. Which one the GTA works under does not stop you claiming the RCM tax you pay, if you are otherwise eligible.

₹2,00,000 for consulting from a US company, at 18%. An import of services is always IGST, so the tax is ₹36,000 of IGST, whatever your state.

How to pay it and claim it

Pay it from the cash ledger. Top up the electronic cash ledger and pay the RCM liability. The credit ledger cannot be used for it.
Show it in GSTR-3B Table 3.1(d), inward supplies liable to reverse charge, for the month the liability arises.
Claim the ITC in Table 4(A)(3) (Table 4(A)(2) for an import of services) once you have paid. The usual conditions apply, so the purchase must be for your business, and blocked credits stay blocked.
Raise a self-invoice if the supplier is unregistered. You issue the invoice, and a payment voucher when you pay. If the supplier is registered, they issue the invoice, without GST.

For services, the tax point is the earlier of the day you pay the supplier and the day after 60 days from the supplier's invoice. For goods, the invoice period is 30 days. If you pay late, interest runs at 18% a year, which you can work out in the GST late fee and interest calculator.

Mistakes to avoid

Paying RCM when the supplier has already charged GST. A GTA that has opted for forward charge, or a registered landlord, charges GST on the invoice. Paying it again under RCM doubles the tax.
Treating every unregistered supplier as RCM. Since 1 February 2019, section 9(4) covers only the notified supplies, so buying goods from a small unregistered vendor is not RCM.
Using ITC to pay it. The portal will not allow it.
Forgetting the composition scheme. A composition taxpayer pays RCM on the notified entries and cannot claim the ITC, so the full amount is a cost.
Leaving it out of GSTR-3B. RCM is due even in a month when you made no sales, and interest runs from the due date.

What to do now

Look through last month's purchases for freight, rent, legal fees, security and any foreign invoices.
For each one, check whether the supplier is registered and whether the entry applies to you.
Work out the tax with the RCM GST calculator, pay it in cash, and report it in Table 3.1(d).
Claim the ITC in the same return if you are eligible. The GST return due dates post shows when this month's GSTR-3B is due.

Sources

The entries above reflect Notification 13/2017-Central Tax (Rate) as consolidated by ICAI up to Notification 7/2025 (16 January 2025), read on 3 November 2026. Rates and entries can change, so re-check the current notification before you file.