E Invoicing RCM invoices self invoice, Goods and Services Tax - GST

[Dilip Sanghvi]

My turnover is more than 50cr and e invoice is applicable to me. Whether i have to generate e invoice when i receive services from

1. Registered GTA- B2B

2. Unregistered GTA- B2C

3. Advocate- B2B

4. Advocate - b2c

As self invoicing is required for rcm invoices hence i am asking this question.

Please guide me for this.

Thanks in advance

Posts / Replies

[CA HemanthKumar]

Dear Dilip Sanghvi,

E-invoice can be generated only by the supplier and not the recipient and that to only for a B to B transactions.

1. Registered GTA- B2B

2. Unregistered GTA- B2C

GTA transactions are excluded for the generation of E-invoices.(Ref Notification No. 13/2020 - Dated: 21-3-2020 - The class of registered person required to issue e-invoice)

3. Advocate- B2B - Advocate has to generate if he has turnover more than 50 crores and registered under GST.

4 . Advocate - b2c - Exempt from GST and no need to issue tax invoice, thereby e-invoicing will not apply

Regards

CA Hemanth Kumar

[ABHISHEK TRIPATHI]

E-invoice

If you are a notified person and you supply goods or services to a registered person then you have to raise an e-invoice.

RCM

Section 9(3) is very interesting. It is for the liability of discharging tax under reverse charge. Understand one thing, the provision doesn’t say that the recipient steps into the shoes of the supplier - it says, the recipient is liable to pay tax (and all the provision is applicable as he is liable to pay tax), thus, the provision is very clear by casting the tax liability straight on the recipient under RCM. Kindly note that only those provisions which are applicable for the person liable to pay tax will be applicable for the recipient under RCM (and no other compliance provision). For instance, raising an invoice is not the responsibility of person liable to pay tax, it’s the responsibility of the supplier (refer to Section 31). In short, to the extent of liability to pay tax the recipient becomes the supplier and all provision w.r.t. liability to pay tax will only apply to the recipient and no other provision.

Issuance of an invoice - RCM

Issuance of invoice germinates from Section 31. If a registered person supplying taxable goods are services, then he has to raise an invoice. One of the major functions of an invoice is to determine the time of supply. For instance, a registered law firm is providing legal services, then the liability to pay tax is on the business entity, however, the liability to raise an invoice is still on the law firm. The invoice compliance part will have to be done by the supplier i.e., registered law firm. After that, the business entity is liable to pay tax on that invoice and if they fail to discharge the tax liability, the business entity will get the notice u/s. 73/74. Because 73/74 is the liability provision that will get attracted for the recipient, not the invoice provision.

In short, Ctrl + F “liable to pay” (tax), these provisions are the provisions envisaged u/s. 9(3) which the recipient has to comply with. Other provisions have to be complied with by the entity whose supply is payable under reverse charge.

In much shorter, registered GTA, registered law firm, they all have to issue an invoice under GST, however, the liability to pay tax is on the recipient. That’s why the FAQ on e-invoicing has stated that law firms will be raising e-invoices. Relevant part of FAQ as below:

“For example, a taxpayer (say, a Firm of Advocates having aggregate turnover in a FY is more than ₹ 500 Cr.) is supplying services to a company (who will be discharging tax liability as recipient under RCM), such invoices have to be reported by the notified person to IRP.”

Self-invoicing

Self-invoice is in the case when the supplier is not registered. As I said above, an invoice is a very important document for determining the time of supply. As an unregistered person will not raise an invoice that’s why the government has made it the responsibility of the recipient to raise the invoice so that we can determine the time of supply.

For instance, unregistered advocate supply legal services to a business entity, then such entity has to raise an invoice and then pay the tax.

[ABHISHEK TRIPATHI]

Your Query

1. Registered GTA

Refer to my analogy above, in the case of registered GTA, they are supposed to raise an invoice. The compliance part of an invoice is not on the recipient. Hence no need to worry about invoice. If you not liable to raise an invoice thus, not liable to raise an e-invoice.

No – E-invoice

2. Unregistered GTA

Now, this person is not registered hence, 31(3)(f) will apply and the invoice raising liability is on the recipient.

Whether e-invoice has to be issued? No, because, perusal of Rule 48(4) e-invoice is only for the registered person supply taxable goods or services to a registered person, hence, registered person who is a supplier (not recipient). But rule 46 is w.r.t. to “invoice” issued by registered person under section 31, thus, the recipient liable to pay tax falls under rule 46, however, the same recipient doesn’t fall under rule 48(4).

You just issue an invoice under rule 46.

3. Same as “1”.

4. What do you mean by advocate –b2C? If you meant unregistered advocate, then, view as follows:

Same as “2”