# Reverse Charge Mechanism (RCM)
## Concept [Section 2(98)]
Under RCM, the liability to pay GST shifts from the supplier to the recipient of goods/services for notified categories of supply.
## Statutory Trigger
RCM applies in two situations:
| Situation | CGST | IGST |
|---|---|---|
| Notified categories of goods/services | Section 9(3) | Section 5(3) |
| Specified goods/services supplied by unregistered persons to specified class of registered persons | Section 9(4) | Section 5(4) |
## Key Principle
Where RCM applies, all provisions of the CGST/IGST Act apply to the recipient as if he were the person liable for paying tax. This means:
- Recipient must self-invoice (in certain cases).
- Recipient pays tax in cash (no ITC utilisation for paying RCM liability).
- Recipient can later claim ITC of the tax paid under RCM (subject to general ITC rules).
## Why RCM?
- Brings unorganised/unregistered suppliers indirectly into the tax net.
- Ensures collection from sectors where compliance is otherwise difficult (e.g., advocate, GTA, sponsorship).
- Streamlines collection from large registered recipients rather than chasing many small suppliers.