Key points
- Under Section 31(3)(f) of the CGST Act, a registered recipient must issue a self-invoice when it pays GST on reverse charge for a supply from an unregistered supplier.
- From 1 November 2024, Rule 47A of the CGST Rules requires the RCM self-invoice to be issued within 30 days of receiving the supply; Rule 47 sets the separate 30-day limit for a supplier's own invoice for services.
- In TallyPrime 7.1, an RCM self-invoice is recorded as a Purchase voucher against an expense ledger with "Is reverse charge applicable" set to Yes, followed by a Journal using Stat Adjustment with the nature "Increase of Tax Liability & Input Tax Credit".
- GST payable under reverse charge cannot be paid from input tax credit; it must be paid in cash from the electronic cash ledger, which TallyPrime 7.1 records through Payment voucher > Ctrl+F (Autofill) > Stat Payment.
- In GSTR-3B, reverse charge tax appears in Table 3.1(d) as liability and in Table 4(A)(3) as eligible ITC once the tax has been paid.
Your client's GSTR-3B shows ₹5,000 of RCM ITC in Table 4(A)(3). Table 3.1(d) shows nothing. The freight bill came from a tempo operator with no GSTIN, and someone booked it as a plain expense, then added the credit by hand on the portal. That gap is now sitting in the portal's RCM Liability/ITC Statement, waiting for a notice.
What is an RCM Self Invoice?
Normally the supplier charges GST and pays it to the government. Under reverse charge, you pay the tax instead of the supplier. When that supplier is unregistered, nobody issues a proper tax invoice, so you issue one to yourself. It works like a receipt you write for your own wallet: the document exists only so the tax you paid and the credit you claim have a paper trail. No self-invoice, no valid ITC under Rule 36(1)(b).
How to Record an RCM Self Invoice in TallyPrime 7.1 — Step by Step
- Create the supplier: Gateway of Tally > Create > Ledger. Name it (say, Vishal Tempo Service), group Sundry Creditors, Registration Type "Unregistered/Consumer", and fill the State correctly. The State decides place of supply, so a wrong State gives you IGST where CGST + SGST was due, or the reverse.
- Create the expense ledger: Gateway of Tally > Create > Ledger, name "Freight Inward (RCM)", group Direct Expenses. Set GST Applicability to Applicable, enter SAC 996511, Taxability Taxable, "Is reverse charge applicable" Yes, and IGST 5% (Tally splits it to 2.5% CGST and 2.5% SGST). Tally tip: if the reverse charge field is missing on the GST Rate Details screen, press F12 on that screen and switch the option on.
- Create a separate voucher type: Gateway of Tally > Create > Voucher Type, name "RCM Self Invoice", Select type of voucher: Purchase. Set Method of Voucher Numbering to Automatic with a prefix such as RCM/26-27/. Tally tip: this gives your self-invoices their own continuous series, which is exactly what an auditor asks to see.
- Record the bill: Gateway of Tally > Vouchers > press F9 (Purchase). Because "RCM Self Invoice" sits under Purchase, Tally lists it straight away; select it. Enter the date of receipt of service, select the supplier, then Freight Inward (RCM) for ₹1,00,000. Do not add tax ledgers to this voucher. The party must be credited ₹1,00,000, not ₹1,05,000, because the transporter is not getting the GST.
- Book the liability and the credit: Gateway of Tally > Vouchers > F7 (Journal) > press J (Stat Adjustment). Choose Type of Duty/Tax: GST, Nature of Adjustment: Increase of Tax Liability & Input Tax Credit, Additional Nature: Purchase under Reverse Charge. Debit Input CGST ₹2,500 and Input SGST ₹2,500; credit Output CGST ₹2,500 and Output SGST ₹2,500. Skip this journal and your ledgers never show the RCM liability, even though the GSTR-3B report does.
- Pay the tax in cash: Gateway of Tally > Vouchers > F5 (Payment) > press Ctrl+F (Autofill) > select Stat Payment. Choose GST, the return period, and the bank ledger (say, HDFC Bank). Tally fills the output CGST and SGST balances; enter the CPIN, CIN and challan date. This amount cannot be set off against your ITC balance. It goes from the electronic cash ledger.
- Check before filing: Gateway of Tally > Display More Reports > GST Reports > GSTR-3B. Drill into Table 3.1(d) and Table 4(A)(3); both should show ₹5,000 for this bill. For October 2026, a monthly filer has until 20 November 2026 to file.
Mistakes That Cost Indian CAs Hours
- Booking the freight in a Journal against a non-GST expense ledger: GSTR-3B never picks up the RCM liability, so 3.1(d) stays blank while 4(A)(3) gets filled by hand. Fix: alter the ledger to "Is reverse charge applicable: Yes" and re-record the bill as a Purchase voucher in the RCM series.
- Issuing the self-invoice months later: Rule 47A gives 30 days from receipt of the supply, and a late self-invoice weakens the ITC claim in any scrutiny. Fix: record the RCM Self Invoice the day the bill arrives, not when the payment is made.
- Setting off RCM liability against ITC in the portal: the cash payment is short and interest runs from the due date. Fix: pay the RCM component through a challan and record it with Ctrl+F > Stat Payment, keeping it separate from your regular ITC set-off.
- Claiming the RCM credit in the same month without paying the tax: ITC under reverse charge is available only after the tax is paid, and the mismatch shows up in the portal's RCM Liability/ITC Statement. Fix: tie the Stat Payment and the ITC claim to the same return period.
- Forgetting the payment voucher under Section 31(3)(g): you paid the unregistered transporter ₹1,00,000 by bank and have no document for it. Fix: keep a Payment voucher with the self-invoice number in the narration, and print it alongside the self-invoice for the file.
Pro Tips for 2026
Check if your transporter is really a GTA. A tempo owner who issues no consignment note is often not a GTA at all, and RCM may not apply; read the bill before you build masters for it. Separately, open the RCM Liability/ITC Statement on the GST portal every month before filing. It carries a running balance of RCM paid versus RCM credit claimed, and a negative figure there tells you which month to fix in Tally. The RCM self-invoice, the Stat Adjustment journal and the challan still have to be keyed in Tally by hand. Only the bank payments to transporters, as rows in an Excel or CSV statement, can be posted by Synergy Automation, which is free, posts directly to Tally without XML files, and works with both Tally Prime and Tally ERP 9.
RCM Self Invoice Flow in TallyPrime
Unregistered supplier ledger
RCM expense ledger at 5%
RCM Self Invoice (F9)
Stat Adjustment journal (F7 > J)
Stat Payment (F5 > Ctrl+F)
Verify GSTR-3B 3.1(d) and 4(A)(3)
Q: How to do an RCM self invoice entry in TallyPrime 7.1?
Create a Purchase-type voucher called RCM Self Invoice and an expense ledger with reverse charge set to Yes. Record the bill without tax ledgers, pass a Stat Adjustment journal (F7 > J) for Increase of Tax Liability & Input Tax Credit, then pay the tax via F5 > Ctrl+F > Stat Payment.
Q: Is a self invoice needed if the GTA is registered under GST?
No. A registered GTA issues its own tax invoice marked "tax payable on reverse charge". You still pay the RCM tax and pass the Stat Adjustment journal, but you do not issue a self-invoice. The self-invoice under Section 31(3)(f) is only for unregistered suppliers.
Q: Can I pay RCM liability using input tax credit?
No. Reverse charge tax must be paid in cash through the electronic cash ledger. Once paid, the same amount can be claimed as ITC in Table 4(A)(3) of GSTR-3B, if the expense is otherwise eligible.
Q: RCM entry in Tally ERP 9 vs TallyPrime 7.1?
The accounting is the same in both. In Tally ERP 9 you use Alt+J for Stat Adjustment in the Journal and Alt+S for Stat Payment in the Payment voucher. In TallyPrime 7.1 you press J in the Journal and Ctrl+F (Autofill) > Stat Payment in the Payment voucher.
Q: How much work is RCM setup in TallyPrime for a new client?
The masters are one-time work: one supplier ledger per transporter, one RCM expense ledger per service and one voucher type. After that, each bill needs three vouchers: the self-invoice, the Stat Adjustment journal and the Stat Payment, which you can do once a month for all RCM bills together.