The GST Council, in its 57th meeting, recommended extending e-invoicing to specified transactions liable to tax under the Reverse Charge Mechanism (RCM), including domestic supplies received from unregistered persons and import of services. Accordingly, the Goods and Services Tax Network (GSTN) has recently issued an advisory to announce the introduction of e-invoicing facility for recipient generated self-invoices under RCM. The key aspects of the advisory are summarized hereinbelow:
- The GSTN has announced the introduction of two new supply type transactions under the e-invoice framework, where GST is payable by the registered recipient under RCM:
- RCMDOM – Domestic Supplies: Recipient-generated self-invoices for specified domestic supplies received from unregistered persons,
- RCMIMP – Import of Services: Recipient-generated self-invoices for import of services from suppliers located outside India
- Proposed facility is intended for registered taxpayers having an Aggregate Annual Turnover (AATO) of ₹5 crore and above (i.e. the current eligibility threshold for e-Invoicing), subject to the applicable statutory provisions and notifications
- Eligible registered recipients will be able to report such self-invoices through authorised Invoice Registration Portals (IRPs) and obtain an Invoice Reference Number (IRN), subject to the prescribed validations
- New functionality has been implemented in the sandbox environments of all six authorised IRPs and is currently available for testing and system integration
- Production rollout date and commencement of the associated reporting requirements are yet to be announced. Applicability and effective date will be governed by the relevant provisions of GST law and notifications issued by the Government
Taxpayers meeting the prescribed turnover threshold should assess the impact on their existing RCM compliance processes and undertake the necessary system-readiness activities. Further technical specifications and operational guidelines are expected to be issued by NIC IRP-1.