When the beneficiary settles the Government obligation rather than the provider. Usually, because the supplier is selling goods, the tax is levied upon the supplier. However, in certain cases, the tax is levied upon the buyer. And the buyer pays GST directly to the government. This is called a reverse charge. Under this, the responsibility to pay tax gets reversed.The applicability of RCM is when the supplier is not registered with GST and is making a supply to a GST registered taxpayer. In such a situation, the registered taxpayer is required to remit the applicable GST as a reverse charge to the government.
The government has also notified a list on which the reverse charge will be applicable.