Reverse Charge Mechanism (RCM) on Banquet & Event Services in India (2026)

Under Section 9(3) and Notification No. 13/2017-Central Tax (Rate) (as amended up to 2026), venue operators must pay GST under RCM for five primary services:

The table below summarizes RCM tax rates, statutory notifications, and ITC reclamation rules for banquet operators:

A critical compliance rule that trips up many banquet accountants:

• No ITC Offset for RCM Payment: Under Section 49(4) of the CGST Act, tax liability under Reverse Charge cannot be paid using existing Input Tax Credit balances; it MUST be discharged in cash via the Electronic Cash Ledger.
• Immediate 100% ITC Reclamation: Once the RCM cash liability is paid in GSTR-3B (Table 3.1(d)), the business is entitled to claim the exact same amount as Input Tax Credit in Table 4(A)(3) of the same month's return, resulting in zero net financial cost.

Venura eliminates RCM compliance mistakes:

• Automated RCM Vendor Tagging: Identifies non-corporate security agencies and GTA freight invoices, auto-calculating RCM cash liabilities.
• One-Click Tally Prime Sync: Exports complete RCM journal entries and cash tax vouchers directly into Tally Prime in seconds.

Complying with statutory self-invoicing rules for RCM transactions:

1. 1
   Mandatory Self-Invoice Generation: When procuring services from an unregistered vendor subject to RCM (e.g. an unregistered security contractor), the registered venue must issue a Self-Invoice under Section 31(3)(f).

1. 2
   Consecutive Serial Numbering: Self-invoices must maintain an independent, unique serial numbering sequence.

1. 3
   Venura Automated Self-Invoicing: Automatically generates compliant Section 31(3)(f) self-invoices and payment vouchers with one tap.

Ensuring clean annual tax audits without audit penalties:

1. 1
   Table 4G Reconciliation: Declare all inward RCM supplies in Table 4G of GSTR-9, matching total tax paid in cash with Table 4(A)(3) of GSTR-3B.

1. 2
   Tally Prime XML Export: Venura exports dedicated RCM ledgers, ensuring 100% reconciliation between financial books and GSTN portal records.

Clarifying RCM applicability across different vendor types:

• Composition Dealers: Supplies from registered composition taxpayers do not attract RCM; the invoice is treated as an exempt Bill of Supply.
• Regular Taxpayers (18% Forward Charge): Services billed by regular corporate vendors are paid under forward charge with 100% ITC.
• Venura Vendor Expense Ledger: Automatically categorizes vendor invoices into Forward Charge, RCM, and Exempt supplies for clean tax filing.