---
title: "Reverse Charge Mechanism (RCM) Under GST | Model Diplomat"
description: "The reverse charge mechanism shifts GST liability to the recipient, impacting tax compliance for businesses and essential for Model UN and policy studies."
url: "https://modeldiplomat.com/learn/glossary/reverse-charge-mechanism"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The reverse charge mechanism is a tax procedure under which the recipient of goods or services, rather than the supplier, is liable to pay the applicable indirect tax to the government.
- Can input tax credit be used to pay reverse charge liability?
- How does the reverse charge mechanism differ from the forward charge mechanism?
- What categories of supply attract reverse charge under GST?
- Is a self-invoice required under reverse charge?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

The reverse charge mechanism is a tax procedure under which the recipient of goods or services, rather than the supplier, is liable to pay the applicable indirect tax to the government.

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## Timeline

1. 1 July 2017

   In India the mechanism is anchored in the Goods and Services Tax framework that took effect on .

2. 13 October 2017

   The Section 9(4) variant—tax on inward supplies from unregistered dealers—was suspended from because of compliance burden, and on its reintroduction it was…

3. 1 April 2019

   The Section 9(4) variant—tax on inward supplies from unregistered dealers—was suspended from 13 October 2017 because of compliance burden, and on its reintro…

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Example

When an Indian company engaged the services of an overseas software consultant in 2023, it paid IGST on that imported service directly to the government under the reverse charge mechanism, as the foreign supplier had no Indian GST registration.

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