Reverse charge mechanism - Compliance - GST Ready Reckoner - GST

Compliance in respect of supplies under reverse charge mechanism The person liable to pay tax under GST under RCM is required to issue invoice in name of self as per provision and rules prescribed under this act . It also Known as Self invoicing . Invoice shall be issued within a period of thirty days from the date of receipt of the said supply of goods or services, or both. [ Rule 47A ] Maintenance of accounts by registered persons : Every registered person is required to keep and maintain records of all supplies attracting payment of tax on reverse charge. Invoice level information in respect of all supplies attracting reverse charge, rate wise, are to be furnished separately in the table 4B of GSTR-1. Advance paid for reverse charge supplies is also leviable to GST . The person making advance payment has to pay tax on reverse charge basis. The ECO may, on services notified under section 9 (5) of the CGST Act,2017 , including on restaurant service provided through ECO, may continue to pay GST by furnishing the details in GSTR 3B, reporting them as outward taxable supplies for the time being. Besides, ECO may also, for the time being, furnish the details of such supplies of restaurant services under section 9(5) of CGST Act 2017 in Table 7A(1) or Table 4A of GSTR-1 , as the case maybe, for accounting purpose. Registered persons supplying restaurant services through ECOs under section 9(5) of CGST Act 2017 will report such supplies of restaurant services made through ECOs in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B , for the time being. Important Notification Circulars Clarification on time limit for the availment of ITC under section 16(4) , specifically in relation to RCM supplies received from unregistered persons [ Circular No. 211/5/2024-GST dated 26.06.2024 ] Accordingly, it is clarified that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and where invoice is to be issued by the recipient of the supplies in accordance with section 31(3)(f) of CGST Act , the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act will be the financial year in which the invoice has been issued by the recipient under section 31(3)(f) of CGST Act , subject to payment of tax on the said supply by the recipient and fulfilment of other conditions and restrictions of section 16 and 17 of CGST Act . In case, the recipient issues the invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax. Further, in cases of such delayed issuance of invoice by the recipient, he may also be liable to penal action under the provisions of Section 122 of CGST Act .