Importing inverters complicates your GST filings because the tax liability shifts onto you, the buyer, under the Reverse Charge Mechanism. Done wrong, it triggers notices; done right, it nets out to zero cash impact. This guide shows how evSuryam flags RCM items, records the liability, surfaces it in GSTR-3B, and lets you reclaim the credit.
Overview
Under normal GST, your supplier collects the tax and pays it to the government. Under reverse charge, that flips: you pay the GST directly. evSuryam handles this by letting you mark a catalog item as subject to reverse charge, so any purchase bill against it automatically flags the tax as RCM payable in your reports.
public/images/docs/reverse-charge-inverters.pngRCM is a self-assessed liabilityThe government doesn't wait for your supplier — it expects you to declare and pay the reverse-charge tax in cash for that period, then claim it back as credit. Skipping the declaration is a compliance failure even when the credit would have made it net-zero.
1. What RCM is
The Reverse Charge Mechanism (RCM) makes the recipient of a supply liable to pay GST instead of the supplier. It exists for situations where the government can't easily collect from the supplier — most commonly imports of services and supplies from unregistered dealers on notified goods.
The key consequence: the reverse-charge tax must be paid in cash for the period (it can't be set off using existing ITC), and only then becomes available to you as input credit. That two-step — pay now, reclaim after — is the heart of getting RCM right.
2. When it applies to imported inverters
When you import inverters (or pay an overseas supplier for related services), the transaction can attract reverse charge because the foreign supplier isn't registered under Indian GST. Common triggers in a solar import:
- Import of services associated with the equipment — commissioning support, technical fees, or design paid to a foreign vendor — fall squarely under RCM.
- Supplies from unregistered persons on notified categories, where you self-assess the tax.
IGST at the customs stage is differentThe IGST you pay to Customs on physically imported goods is collected at the border and isn't reverse charge — you claim it as ITC from your Bill of Entry. RCM bites on the service and unregistered-supplier elements. When in doubt about a specific bill, confirm the treatment with your CA before flagging it.
3. Flag the catalog item
Set this up once on the catalog item so you never have to remember it per-bill.
- Open the imported inverter (or the related imported service) in your catalog.
- Tick Subject to Reverse Charge.
- Save. From now on, any purchase bill logged against this item automatically flags its tax as RCM payable in your GST reports.
This keeps the determination at the source of truth — the catalog — rather than relying on whoever enters the bill to know the rule.
4. Log the purchase bill
When the import bill arrives, record it like any other supplier bill under Inventory → Purchases — with one difference: the RCM-flagged lines are booked as a tax liability you owe, not as tax the supplier charged you.
- Create a new purchase bill and select the supplier.
- Add the imported inverter line. Because the item is flagged, evSuryam computes the applicable GST and marks it RCM payable.
- Enter the taxable value (your import cost / invoice value as required) so the reverse-charge tax is calculated on the correct base.
- Save the bill. The liability now sits ready to flow into your GSTR-3B for the period.
The general purchase-bill mechanics — supplier records, stock effects, document storage — are covered in Inventory & purchases.
5. The self-invoice obligation
You must raise a self-invoice for unregistered-supplier RCMWhen the supply is from an unregistered or foreign supplier, GST law requires the recipient to issue a self-invoice for the inward supply, because there's no GST-compliant supplier invoice to rely on. Keep this self-invoice on file — auditors specifically look for it on reverse-charge transactions.
Pay the RCM tax in cash, separatelyThe reverse-charge liability is discharged through the electronic cash ledger for that period — you cannot offset it against your accumulated ITC. Only after it's paid does the same amount become available to claim as credit. Budget the cash even though it nets to zero over the cycle.
6. How it appears in GSTR-3B
At month-end, go to Reports and download your GSTR-3B summary. The reverse-charge amounts are separated out automatically, ready for your CA. In the return they show up in two distinct places:
- Outward / inward supplies liable to reverse charge — the RCM tax you owe is declared here and paid in cash for the period.
- Eligible ITC — the same tax is then claimed as input credit (covered next), so it doesn't become a real cost.
Because evSuryam keeps the RCM figures distinct from your ordinary output and input tax, your CA can reconcile them line by line instead of untangling a blended total.
7. Claiming the ITC
Once you've paid the reverse-charge tax in cash for the period, that exact amount becomes Input Tax Credit you can claim — provided the inverter is used for your taxable business (which a resale or installation inverter is). The net effect over the cycle is zero cash outflow on the tax: you paid it, then you reclaimed it.
- Claim the ITC in the same period you discharge the liability, subject to the usual eligibility conditions.
- Keep the purchase bill and the self-invoice on file as evidence supporting the claim.
- Reconcile against your GST portal records before filing — see GST & compliance for the broader ITC workflow.
What's next
Reverse charge is one of two special cases evSuryam handles — the other is government subsidy money on residential rooftops. See the PM Surya Ghar subsidy walkthrough, and review the full tax picture in GST & compliance.