# RCM on Services by Government / Local Authority
## Coverage
Any services provided by Central Government, State Government, Union Territory or Local Authority to any business entity located in taxable territory → RCM applies, business entity pays.
## Carve-outs — when this entry does NOT apply
| Service | Mechanism |
|---|---|
| Services by Department of Posts | FCM — government pays |
| Services by Ministry of Railways | FCM |
| Transport of goods or passengers by Government | FCM |
| Services to an aircraft or vessel inside or outside the port | FCM |
| Renting of immovable property by Government | Covered under a separate RCM entry (Entry No. 5), not this one |
## Exemption-first check
Services by Government/UT/Local Authority are exempt (so RCM does not arise) when supplied to:
- A person other than a business entity OR to CG/SG/UT/LA themselves
- A business entity whose preceding-FY turnover ≤ registration threshold
- Any case where value of service ≤ ₹5,000
## Decision flow
```
1. Is the recipient a business entity above the threshold? NO → Exempt; stop.
2. Is the value of service > ₹5,000? NO → Exempt; stop.
3. Is the service a carve-out (post, rail, transport, vessel, immovable rent)? YES → use the relevant rule (FCM or separate RCM entry).
4. Otherwise → RCM under this entry; business entity pays.
```