The curious case of the missing tax
The bill on the clerk's desk: one lorry, Pune to Nashik, ₹25,000 freight. GSTIN present. HSN of transport service present. Tax rows: empty. Total equals taxable to the rupee. She brings it to the accounts head with the classic question, half worried, half hopeful: is this a mistake we can ignore?
Neither. It is the system working as designed, and the design has a name you already half know: reverse charge mechanism, RCM. I wrote the general page on reverse charge purchases earlier. This is its most common factory face, the goods transport agency, and it deserves its own investigation because the missing tax keeps getting misread as a discount.
Under reverse charge on goods transport, the recipient of the service, you, pays the GST instead of the transporter. The freight bill correctly shows no tax. You compute it, pay it in cash, and claim credit under the usual conditions. Rates and exceptions move. Your CA confirms the current position, not this box.
The mirror rule
Normal GST points one way: supplier charges, you pay the supplier, supplier deposits. RCM holds up a mirror: the transporter charges nothing, and you deposit the tax yourself. Same tax, opposite direction. Once you see the mirror, every RCM situation reads the same way. The supplier's paper looks incomplete. Your obligation completes it.
Why does the law do this? Follow the money it is chasing. Small transporters, thin margins, patchy filing. Rather than policing thousands of lorry owners, the tax rides on recipients who already file. It is compliance physics: collect where the books are cleanest. Whether you love it or not, and nobody loves it, the mirror is load-bearing. Ignore the missing tax and the liability sits on you with interest, discovered at the worst possible moment, which is always scrutiny.
One fork to know about: some transporters charge GST themselves under the forward charge route, where the option exists and they take it. Then the bill looks like any other purchase bill, tax rows filled, and you claim ITC the ordinary way with 2B watching. So your first job on any freight bill is the fork check: tax present means ordinary purchase, tax absent means mirror. Two paths, decided in five seconds, and every error I have seen came from walking the wrong one on autopilot.
Read top to bottom, the bill tells you exactly what to do. Most desks stop at the dashed box and call it a mistake.
The entries in Tally
Book the freight ₹25,000 as the expense it is. Then raise the self-invoice: you, billing yourself for tax purposes, computing the RCM tax at the rate your CA confirms, paying it in cash, not from credit. Cash first, always, under RCM. Then the credit side: paid-in-cash RCM tax enters the normal credit chain with the usual conditions around it. Same timetable, same portal discipline, same clock.
The classic error here is paying RCM tax from credit, which the law does not permit, or forgetting the self-invoice entirely and booking ₹25,000 as a tax-free expense. Both surface at scrutiny wearing interest. The entries take five minutes when the habit exists. The habit is: every freight bill without tax gets its mirror entry the same week. No mirror, no close of the file.
The mirror works in both directions, and outward lots prove it. When you pay the freight for goods you send out, you are the recipient of the transport service again, so the same mirror applies: compute, pay in cash, claim per conditions. Inward or outward, the question never changes. Who paid the transporter? That person holds the mirror. Your freight file simply grows a second section, and the same weekly habit closes both.
The freight file
File the freight bill with its lorry receipt and, where one exists, the e-way print. Our e-way page explains the movement half. The RCM self-invoice staples to the same file with the rate and the CA's confirmation noted. An officer opening it should see the whole mirror in one place: their empty tax rows, your computed payment, your credit claim. Ninety seconds, no queries.
And the boundary, because you expect it from me by now: our gate validates the freight bill as printed, GSTIN, arithmetic, HSN. It does not compute your RCM, does not remind you of the mirror, does not know your CA's rate. A valid bill with missing RCM is the most dangerous paper in this whole series: perfect to every validator, wrong in exactly the way validators cannot see. Your process carries the mirror. Carry it weekly.
- CBICCGST Act (CBIC)
Reverse charge provisions. Primary. Rates and exceptions move; confirm.
- EntryLedgerReverse charge purchases
The general RCM page. This one is its factory face.
Why does my freight bill show no GST?+
Because under RCM on goods transport, you pay the tax, not the transporter. The empty rows are your liability wearing a disguise, not their error.
How do I post RCM freight in Tally?+
Book the freight, raise a self-invoice, pay the computed tax in cash, claim per the usual conditions. Five minutes with the habit, a scrutiny saga without it.
Can I claim ITC on RCM freight tax?+
Paid in cash, it enters the normal credit chain with the usual conditions. Cash first is the part desks forget. Confirm treatment with your CA.
Does the scan gate catch missing RCM?+
No. The bill is valid as printed. RCM is your off-page obligation, and any software claiming to detect it is guessing at your CA's job.