Inward Supply of Goods from Unregistered Dealers (RCM) in TallyPrime

When you purchase goods from unregistered dealers under GST, you’re required to pay tax under the Reverse Charge Mechanism (RCM).

This means you, the buyer, must pay the GST directly to the government instead of the seller.

In this post, you’ll learn how to record such inward supply of goods in TallyPrime using simple steps and examples.

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1. What is Reverse Charge (RCM) on Purchases from Unregistered Dealers in TallyPrime?

Normally, the seller collects and pays GST.

But when you buy from an unregistered supplier, the responsibility shifts to you as the buyer. This is known as Reverse Charge.

Such purchases must be reported properly in TallyPrime for correct GST compliance.

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2. Example Scenario to Record Inward Supply of Goods from Unregistered Dealers (RCM) in TallyPrime

Let’s say:

• You purchased raw materials worth ₹10,000
• The supplier is not registered under GST
• GST applicable under RCM is 18% (CGST 9% + SGST 9%)
• You need to record this in TallyPrime and pay ₹1,800 as tax to the government

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3. Step-by-Step Process to Record Inward Supply of Goods from Unregistered Dealer in TallyPrime

Step 1: Enable GST and Reverse Charge

1. Go to F11: Features → Statutory & Taxation
2. Enable Goods and Services Tax (GST): Yes
3. Set Enable Reverse Charge Mechanism: Yes

This allows you to apply reverse charge settings in your vouchers and ledgers.

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Step 2: Create the Unregistered Supplier Ledger

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create
2. Name: Unregistered Supplier
3. Under: Sundry Creditors
4. GST Registration Type: Unregistered

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Step 3: Create a Purchase Ledger with RCM

1. Go to Accounts Info > Ledgers > Create
2. Name: Purchase – RCM
3. Under: Purchase Accounts
4. Enable GST: Yes
5. Nature of transaction: Purchase From Unregistered Dealer
6. Set Is Reverse Charge Applicable: Yes

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Step 4: Create Tax Ledgers (if not already created)

• CGST @ 9%
• SGST @ 9%

Set:

• Under: Duties & Taxes
• Type: GST
• Tax Type: CGST/SGST
• Rate: As applicable

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Step 5: Record the Purchase Voucher

1. Go to Gateway of Tally > Vouchers > F9: Purchase
2. Select Party Ledger: Unregistered Supplier
3. Select the Purchase – RCM ledger
4. Enter Amount: ₹10,000
5. Do not manually add tax ledgers
6. Tally will mark this as a Reverse Charge transaction and show tax liability in reports

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4. View Tax Liability in GST Reports of Recording Inward Supply of Goods from Unregistered Dealers (RCM) in TallyPrime

To verify the tax effect:

• Go to Display More Reports > Statutory Reports > GST > GSTR-3B
• Under Liability under Reverse Charge, you will see the ₹1,800 tax payable
• This amount should be paid to the government in your next GST return

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5. Summary of the Transaction of Recording Inward Supply of Goods from Unregistered Dealers (RCM) in TallyPrime

Description	Amount (₹)
Goods Purchased (Unregistered)	10,000
GST Payable under RCM (18%)	1,800
Total Outflow	11,800

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6. Conclusion

Purchasing goods from unregistered dealers requires careful recording under RCM in TallyPrime.

By enabling reverse charge and using the correct ledgers, Tally automatically tracks and reports your GST liability.

Make sure to:

• Use correct purchase and tax ledgers
• Mark the supplier as unregistered
• Regularly check GSTR-3B and GST Computation reports

This ensures your books are accurate and your GST filings stay compliant.

Let me know if you want help with partial returns, debit notes, or how this reflects in GSTR-2A/3B.