Sales of RCM Supplies Using Nature of Transaction (Sales to Consumer) Taxable in TallyPrime

If you’re selling goods or services that fall under Reverse Charge Mechanism (RCM), and your buyer is a consumer or unregistered party, TallyPrime gives you a simple way to record this using the Nature of Transaction: Sales to Consumer – Taxable.

In such cases, you do not collect GST, but you must indicate in your records and GST returns that this is an RCM-based transaction.

Let’s walk through this process with a simple explanation and example.

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1. What is the Nature of Transaction: Sales to Consumer – Taxable in TallyPrime?

This option is used when:

• You are selling taxable goods or services
• The buyer is not registered under GST
• GST is not charged by you because it’s a reverse charge supply

TallyPrime uses this “Nature of Transaction” to flag the sale as a B2C taxable sale without adding tax.

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2. Example Scenario: Sales of RCM Supplies Using Nature of Transaction (Sales to Consumer) Taxable in TallyPrime

Let’s say:

• You sell scrap material, which is reverse charge applicable
• The customer is a retail buyer or a small business not registered under GST
• Value of sale: ₹20,000
• GST: Reverse charge applicable (say 18%)
• But you do not charge GST to the buyer

You just need to record the sale and indicate that it’s a taxable B2C reverse charge sale.

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3. Step-by-Step Guide to Record the Sale in TallyPrime

Step 1: Enable GST and RCM in TallyPrime

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

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Step 2: Create or Update the Party Ledger

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create
2. Name: Cash Customer / Local Consumer
3. Under: Sundry Debtors or Cash
4. GST Registration Type: Unregistered

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Step 3: Create the Sales Ledger

1. Go to Accounts Info > Ledgers > Create
2. Name: Sales – RCM to Consumer
3. Under: Sales Accounts
4. Enable GST: Yes
5. Nature of Transaction: Select Sales to Consumer – Taxable
6. Set Is Reverse Charge Applicable: Yes

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Step 4: Create the Stock Item (if applicable)

1. Go to Inventory Info > Stock Items > Create
2. Name: Scrap Material
3. Enter Units and HSN Code
4. Leave GST rate blank (you are not charging GST)

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Step 5: Record the Sales Voucher

1. Go to Gateway of Tally > Vouchers > F8: Sales
2. Select Party Ledger: Cash Customer
3. Select Sales Ledger: Sales – RCM to Consumer
4. Select the Stock Item and quantity
5. Do not add any GST ledgers

Tally will treat this as a B2C taxable reverse charge sale, and the invoice will reflect that GST is not charged by you.

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4. How It Appears in GST Returns in TallyPrime

• In GSTR-1, the sale appears under B2C (Others)
• It will also be marked as Reverse Charge Applicable
• In GSTR-3B, no output tax liability is shown for this sale

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5. Sample Summary: Sales of RCM Supplies Using Nature of Transaction (Sales to Consumer) Taxable in TallyPrime

Particulars	Value (₹)
Sale of Scrap Material	20,000
GST Charged to Buyer	0
Reverse Charge Flag	Yes
Buyer Type	Consumer (Unregistered)

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6. Conclusion

Using Nature of Transaction – Sales to Consumer – Taxable in TallyPrime helps you:

• Accurately record RCM sales to unregistered buyers
• Ensure proper classification in GSTR-1 and GSTR-3B
• Avoid charging tax where not required

This setup is ideal for small retail sales involving goods or services under reverse charge, keeping your GST compliance simple and error-free.