Import of Services [Under GST RCM] in TallyPrime: 5 Simple Steps

Under GST, when you import services from a supplier outside India, you, the recipient, are responsible for paying GST under Reverse Charge Mechanism (RCM).

TallyPrime allows you to record such transactions easily and maintain accurate GST reports.

Let’s go step-by-step with a simple example.

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1. What is Import of Services under RCM in TallyPrime?

When you receive a service from a supplier who is located outside India, and the place of supply is in India, then GST is applicable.

In this case, you (the receiver) must:

• Pay IGST under reverse charge
• Record the expense in books
• Claim Input Tax Credit (ITC), if eligible

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Example Scenario

You imported software consulting services from a company in the US.

• Service: Software consultancy
• Invoice Value: ₹1,00,000
• IGST @ 18%: ₹18,000
• Total cost to you: ₹1,18,000 (₹1,00,000 + ₹18,000 paid as IGST under RCM)

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2. Step-by-Step: Record Import of Services under RCM in TallyPrime

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Step 1: Enable GST and Reverse Charge in TallyPrime

1. Press F11 > F3: Statutory & Taxation
2. Set Enable Goods and Services Tax (GST) to Yes
3. Set Enable Reverse Charge to Yes
4. Press Ctrl+A to save

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Step 2: Create or Alter GST Ledgers

a) Create an IGST Ledger (Reverse Charge)

• Go to Accounts Info > Ledgers > Create
• Name: IGST – RCM
• Under: Duties & Taxes
• Type of Duty/Tax: GST
• Tax type: Integrated Tax
• Percentage of Calculation: 18%
• Set Is reverse charge applicable? to Yes

b) Create RCM Purchase Ledger

• Name: Import of Services
• Under: Purchase Accounts
• Set GST Applicable: Yes
• Type of Supply: Services
• Set Is reverse charge applicable? to Yes
• Taxability: Taxable
• Rate: Leave blank (handled by tax ledger)

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Step 3: Record the Journal Voucher

1. Go to Vouchers > F7: Journal
2. Press F2 to change the date of transaction
3. Enter the following:

Debit:

• Import of Services A/c – ₹1,00,000 (Expense)
• IGST – RCM A/c – ₹18,000 (Tax Payable)

Credit:

• Party Ledger (US Supplier) – ₹1,00,000
• GST Payable under RCM – ₹18,000 (Reverse Charge Liability)

Note: The actual payment of ₹18,000 to GST department will be done separately.

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Step 4: Book ITC (Optional – if eligible)

If you are eligible to claim ITC on the reverse charge IGST, you can:

• Use a Journal Voucher
• Debit: Input IGST Ledger – ₹18,000
• Credit: IGST – RCM Ledger – ₹18,000

This reflects that tax is paid and input credit is claimed.

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Step 5: Check GSTR-3B and GSTR-2A Reporting

• Go to Display More Reports > Statutory Reports > GST > GSTR-3B
• You will see the taxable value and IGST under Reverse Charge in the correct sections

In GSTR-3B, reverse charge details are shown under:

• 3.1(d) Inward supplies liable to reverse charge
• ITC is reflected in 4(A)(3) – ITC on inward supplies liable to reverse charge

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3. Final Notes: Import of Services under RCM in TallyPrime

• Reverse Charge IGST must be paid in cash, not through ITC.
• You can claim ITC in the same month, provided you meet conditions under GST law.
• Maintain proper documentation like invoice and foreign remittance proof.

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4. Summary

Recording import of services under reverse charge in TallyPrime involves:

• Enabling GST and reverse charge
• Creating proper ledgers
• Passing a journal voucher with tax
• Reflecting the transaction in GST returns

TallyPrime takes care of correct GST reporting if the entries are done properly.

Let me know if you want a template or sample company data to practice this.