RCM Liability/ITC Statement: A Complete GST Compliance Guide
The RCM Liability/ITC Statement is a ledger on the GST portal that tracks Reverse Charge Mechanism (RCM) liability declared in Table 3.1(d) of GSTR-3B against the corresponding Input Tax Credit (ITC) claimed in Table 4A(2) and 4A(3). Live since the August 2024 return period, it flags mismatches between what a business owes under RCM and what it has claimed back as credit, and as of a GSTN advisory dated 29th December 2025, negative balances in this statement will soon block GSTR-3B filing altogether. This guide covers how the statement works, how to report and amend your opening balance, and what the new validation rule means for your monthly filing.
What Is the RCM Liability/ITC Statement?
Under reverse charge, the recipient of goods or services, not the supplier, is responsible for paying GST directly to the government. This typically applies when the supplier is unregistered or for specific notified goods and services. Because RCM liability and the related ITC claim often land in different return periods, mismatches between the two had no dedicated tracking mechanism until this statement was introduced.
The RCM Liability/ITC Statement closes that gap by automatically capturing the following:
- RCM liability paid, as declared in Table 3.1(d) of GSTR-3B
- Corresponding ITC claimed, from Table 4A(2) and 4A(3) of GSTR-3B
Applicability:
- Monthly filers: live from the August 2024 tax period
- Quarterly filers: live from the July–September 2024 quarter
Access path: Services >> Ledger >> RCM Liability/ITC Statement
How to Report Your RCM ITC Opening Balance
When the statement launched, taxpayers needed to declare an opening balance to account for RCM liability and ITC mismatches from before August 2024. While the original declaration and amendment windows have closed, the reporting logic below remains relevant for understanding your current ledger balance and for any future opening-balance facility GSTN reopens.
Navigation: Login >> Report RCM ITC Opening Balance, or Services >> Ledger >> RCM Liability/ITC Statement >> Report RCM ITC Opening Balance
How to determine the value to report:
| Scenario | Value to report |
|---|---|
| RCM liability declared in Table 3.1(d), but corresponding ITC not yet claimed in Table 4A(2)/4A(3) | Positive value, equal to the unclaimed differential |
| ITC claimed in Table 4A(2)/4A(3), but corresponding RCM liability not yet declared in Table 3.1(d) | Negative value, equal to the excess claimed |
| RCM ITC previously reversed and now being reclaimed | Reclaim via Table 4A(5) of GSTR-3B; do not report this as an opening balance |
Worked example: If you paid ₹1,00,000 in RCM liability (Table 3.1(d)) but claimed only ₹80,000 in corresponding ITC (Table 4A(2)/4A(3)), report ₹20,000 as a positive opening balance.
Original deadlines (for reference):
- Reconciliation period: up to July 2024 (monthly filers) / Q1 (April–June 2024) (quarterly filers)
- Opening balance declaration: closed 31 October 2024
- Amendment window (up to three corrections): closed 30 November 2024
Note: These dates are retained for historical accuracy and to help readers verify their own filing history, not as live action items.
The Negative Balance Restriction: What Changed in December 2025
On 29th December 2025, GSTN issued an advisory stating that negative values or ITC claims exceeding the available balance will no longer be permitted in the RCM Liability/ITC Statement. Until this change, an excess claim only triggered a warning message, and filing was still allowed. Going forward, a negative closing balance will block GSTR-3B filing until it is resolved.
The validation rule: RCM ITC claimed in Tables 4A(2) and 4A(3) must be less than or equal to the combined value of RCM liability paid in Table 3.1(d) for the same return period plus the closing balance of the RCM Liability/ITC Statement.
If your closing balance is negative, you have two ways to clear it before filing:
- Pay the additional RCM liability in Table 3.1(d) equal to the negative closing balance, or
- Reduce the ITC claimed in Table 4A(2) or 4A(3) for the current period by the same amount
Worked example: If your RCM Liability/ITC Statement shows a closing balance of −₹5,000, you can either pay an additional ₹5,000 in Table 3.1(d) this period or reduce your RCM ITC claim in Table 4A(2)/4A(3) by ₹5,000 whichever fits your cash position.
This same restriction applies in parallel to the Electronic Credit Reversal and Reclaimed Statement (the ITC reclaim ledger) under the same advisory. If your business reverses and reclaims ITC under Table 4(B)(2) and Table 4(A)(5)/4(D)(1), check both ledgers before filing.
Why this matters operationally: Businesses that have historically treated the warning message as advisory rather than blocking will need to build the reconciliation step into their monthly close process now, not after a return gets rejected.
Furnishing Bank Account Details: Rule 10A
Separately from RCM reporting, Rule 10A requires every GST-registered taxpayer to furnish valid bank account details:
- Within 30 days of registration, or
- At the time of furnishing details of outward supplies (whichever is earlier)
Since 1st September 2024, taxpayers cannot furnish outward supply details without valid bank account details on file.
Navigation: Services >> Registration >> Amendment of Registration (Non-Core Fields)
How MBG Supports RCM and GST Compliance
Reconciling RCM liability against ITC claims, tracking validation rules as GSTN tightens them, and keeping monthly filings audit-ready is an ongoing operational load, not a one-time fix. MBG’s GST Advisory and Compliance team helps businesses build the reconciliation discipline this ledger now requires, from opening balance corrections to ongoing RCM-ITC monitoring. To review your current RCM position, connect with our GST advisory team.
Additional Resources
- GST Input Tax Credit Rules and ITC Claiming Strategies for Businesses for general ITC eligibility, GSTR-2B matching, and the 30 November annual claim deadline.
- GSTR-3B and GSTR-1 Reporting Compliance and Reconciliation Guidance
- GST Scrutiny 2026: Governance and Compliance Playbook for Indian Businesses
- Mitigate GST Risks with GST Health Check Services