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Handling Unrecorded Inward Reverse Charge (RCM) Invoices in TallyPrime vs. GST Portal

17 Jul 2026 General 1 views
When the GST portal reflects auto-populated Input Tax Credit (ITC) data or liability under Reverse Charge Mechanism (RCM) in your GSTR-2B that does not exist in your accounting books, it triggers a severe data mismatch. Leaving this entry unrecorded can attract departmental scrutiny and tax penalties. This technical guide outlines how to trace, account for, and reconcile missing RCM inward bills within TallyPrime to achieve compliance.
1. Architectural Overview of the Discrepancy
Under the Goods and Services Tax (GST) framework, certain transactions place the statutory liability to deposit tax on the recipient rather than the supplier.
  • The Cause: A registered vendor (such as a Goods Transport Agency (GTA) or Legal Advisor) filed their GSTR-1 and flagged your invoice with the "Is Reverse Charge Applicable?" attribute set to True.
  • The Result: The GST Portal pushes this transaction into your GSTR-2B and GSTR-3B (Table 3.1(d)), creating a mandatory tax liability for you.
  • The System Conflict: Because your TallyPrime database lacks this source voucher, your book-calculated liability understates your true statutory obligation.
2. Step-by-Step Technical Reconciliation
Phase A: Audit and Identification
Before altering your ledger balances, extract the immutable metadata from the GST Portal.
  1. Navigate to the GST Common Portal and access Services > Returns > Returns Dashboard.
  2. Select the targeted Financial Year and Return Period.
  3. Open GSTR-2B (Auto-drafted ITC Statement).
  4. Click on Inward Supplies Liable to Reverse Charge (RCM).
  5. Isolate and document the following attributes:
    • Supplier GSTIN & Legal Name
    • Original Invoice Number & Document Date
    • HSN/SAC Code & Place of Supply (POS)
    • Taxable Value, CGST, and SGST/UTGST quantum
Phase B: Ledger Configurations in TallyPrime
To process an RCM entry seamlessly, specific configurations must be applied to the master ledgers.
1. The Expense/Purchase Ledger Configuration
  • Path: Gateway of Tally > Create / Alter > Ledger.
  • Under: Direct Expenses or Purchase Accounts.
  • Is GST Applicable: Applicable.
  • GST Rate Details: Choose Specify Details Here.
  • Taxability Type: Taxable.
  • GST Rate: Enter the appropriate percentage (e.g., 5% for GTA, 18% for Legal Service).
  • Enable Reverse Charge: Toggle "Is reverse charge applicable?" to Yes.
    (If you cannot see this option, press F12 (Configure) within the configuration panel and activate "Enable Reverse Charge calculation").
2. The Statutory Adjustment Ledger
  • Create an asset account to temporarily hold the debit entry of your journal adjustment until it is flipped to ITC.
  • Under: Current Assets (e.g., Ledger Name: Tax on RCM - Clearing A/c).
Phase C: Voucher Booking Sequence
Step 1: Record the Inward Supply Invoice
Book the invoice to establish the physical purchase track record matching your vendor's submission.
  1. Go to Gateway of Tally > Vouchers > F9 (Purchase).
  2. Press Ctrl+H (Change Mode) and select Accounting Invoice.
  3. Input the exact Supplier Invoice No. and Date copied from GSTR-2B.
  4. Select the Party A/c Name. Ensure their GSTIN matches the portal entry.
  5. Select the configured Expense Ledger. Input the Taxable Value.
  6. Critical Control: Do not append CGST or SGST duty ledgers directly onto the face of this voucher. Because this is an inward RCM bill, the vendor cannot charge you these duties.
  7. Verify tax tracking: Press Ctrl+O (Related Reports) > GST - Tax Analysis. Ensure Tally displays the text "Amount of Tax subject to Reverse Charge".
  8. Save (Ctrl+A).
Step 2: Escalate Tax Liability (Statutory Adjustment)
You must officially recognize that you owe this CGST and SGST component to the government.
  1. Go to Vouchers > F7 (Journal).
  2. Press Alt+J (Stat Adjustment).
  3. Configure the parameters precisely:
    • Type of Duty/Tax: GST
    • Nature of Adjustment: Increase of Tax Liability
    • Additional Details: Purchase under Reverse Charge
  4. Debit: Tax on RCM - Clearing A/c (Current Asset ledger).
  5. Credit: CGST (Duties & Taxes) ledger.
  6. Credit: SGST (Duties & Taxes) ledger.
  7. Input the calculated tax values to precisely balance out the credit duties matching the portal. Save the voucher.
Step 3: Avail Input Tax Credit (ITC)
Once the liability is accepted in books, you can simultaneously claim the offsetting input credit in the same tax cycle.
  1. In F7 (Journal), press Alt+J (Stat Adjustment) again.
  2. Set configuration parameters:
    • Type of Duty/Tax: GST
    • Nature of Adjustment: Increase of Input Tax Credit
    • Additional Details: Purchase under Reverse Charge
  3. Debit: CGST (Duties & Taxes) ledger.
  4. Debit: SGST (Duties & Taxes) ledger.
  5. Credit: Tax on RCM - Clearing A/c (The current asset ledger drops to zero balance).
  6. Save the transaction.
3. Post-Entry Verification in GST Reports
To ensure complete systemic data synchronization, navigate to Gateway of Tally > Display More Reports > Statutory Reports > GST Reports > GSTR-3B (or GSTR-2).
Validate that the transaction is cleanly populated under Table 3.1(d) - Inward Supplies Liable to Reverse Charge, reflecting matching values for both the Taxable Amount and the individual Central and State tax tiers.
 
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