Self Invoice Format Under RCM: GST Rules, Requirements and Applicability
Under the Goods and Services Tax (GST) law in India, certain supplies are taxable under the Reverse Charge Mechanism (RCM), where the recipient is responsible for paying GST instead of the supplier. In specified cases, the recipient may also be required to issue a self-invoice to document the transaction.
What is a Self Invoice Under GST?
A self-invoice is an invoice issued by the recipient of goods or services when the recipient is liable to pay GST under reverse charge and the prescribed conditions for issuing such an invoice are satisfied.
Section 31(3)(f) of the CGST Act requires a registered person liable to pay tax under reverse charge to issue an invoice for supplies received from an unregistered supplier, subject to the applicable provisions. CBIC has specifically clarified that a registered person receiving goods or services from an unregistered person in circumstances covered by RCM is required to issue a self-invoice.
When is a Self Invoice Required Under RCM?
A self-invoice is primarily relevant where:
The recipient is a GST-registered person.
The supply is covered by the Reverse Charge Mechanism.
The supplier is unregistered, where the law requires the recipient to document the supply through a self-invoice.
However, a self-invoice should not be confused with every RCM transaction. The requirement depends on the specific legal provision applicable to the transaction.
For example, CBIC has clarified that where a registered person receives services from a person located outside India and the transaction is taxable under RCM, the recipient is required to issue an invoice in the prescribed manner. In the case of import of goods, however, a separate self-invoice is not required because the import is covered by a Bill of Entry.
What Details Should a Self Invoice Contain?
There is no separate statutory format prescribed exclusively as a “self-invoice format”. Instead, the invoice should contain the applicable particulars prescribed under Rule 46 of the CGST Rules.
Important details generally include:
Name, address and GSTIN of the recipient.
Name and address of the supplier.
A unique and consecutive invoice number.
Date of issue.
Description of goods or services.
HSN or Accounting Code, as applicable.
Taxable value of the supply.
Applicable GST rate.
Amount of CGST, SGST/UTGST or IGST.
Place of supply, where applicable.
A clear indication that tax is payable under reverse charge.
Signature or digital signature, where applicable.
Rule 46 prescribes the particulars required in a GST tax invoice, including the indication of whether tax is payable under reverse charge.
Time of Issuing Self Invoice
The timing of the invoice is important for RCM compliance. CBIC's FAQ states that, in the relevant cases involving supplies from an unregistered person, the registered recipient should raise the self-invoice on the date of receipt of the goods or services.
The transaction should also be appropriately reported in the GST returns for the relevant tax period.
Self Invoice and Input Tax Credit
Payment of GST under RCM does not automatically mean that the recipient can claim input tax credit. ITC remains subject to the conditions and restrictions prescribed under the GST law.
The GST rules recognise an invoice issued under Section 31(3)(f) as one of the documents on the basis of which input tax credit may be availed, subject to fulfilment of the applicable ITC conditions.
Download Self Invoice Format Under RCM
Businesses should maintain proper documentation for RCM transactions and ensure that the invoice contains the applicable particulars prescribed under GST law.
You can use the Self Invoice Format Under RCM available on Palgou as a practical reference for preparing the document.
Important: The exact requirement to issue a self-invoice depends on the nature of the transaction and the applicable RCM provisions. Businesses should verify the applicable GST notification, section and rules before issuing the document.
Disclaimer
This article is intended for general informational purposes only and should not be considered professional or legal advice. GST provisions, notifications and procedures may be amended from time to time. Readers should verify the applicable provisions and seek professional advice wherever required.