RCM Full Form In GST

What is the Full Form of RCM in GST?

RCM full form in GST is Reverse Charge Mechanism. In order to understand the reverse charge mechanism, you first need to know what the GST collection process looks like. So whenever you buy something, you’ll be charged the goods amount+GST, and you’ll directly pay the total amount to the seller. And it is the responsibility of the seller to then submit this GST to the government. In short, the seller is actually functioning as a middleman. This GST collection process is also known as the forward charge process. But with RCM or reverse charge mechanism, the role of middleman or seller is absent. Instead, you (the buyer) pay the GST or tax directly to the government when buying stuff or opting for a service.

What Else Should You Know About Reverse Charge Mechanism?

The reverse charge mechanism isn’t an optional concept, it is applicable to specific notified goods and services. You can’t just use the Reverse Charge Mechanism as you wish. The government has issued a list of specific goods and services where the buyer can directly pay the GST to the government, and there is no role of the seller in the submission of GST on behalf of the customer or consumer.