RCM Liability on Delayed Invoices – GST Implications

[Ramanathan Seshan]

Dear Experts,

Company A took a premises on rent in January 2025. Due to disputes with the unregistered vendor, rent invoices for February and March 2025 were not raised at the time and were only issued in April 2025. No provision for these expenses was made in the books for FY 2024–25. Additionally, as the vendor is unregistered, Company A is liable to pay GST under reverse charge mechanism (RCM) on the rent. Since the invoices were received only in April 2025, how should this RCM liability be disclosed and paid—can you please throw light of disclosures to be made in GSTR-3B and GSTR-9 and its implications.

Regards,

S Ram

AI Summary

Reverse charge on rent arises on earlier of payment or statutory period from invoice, determining GSTR-3B disclosure.
Rent for Feb-Mar 2025 from an unregistered vendor was invoiced only in April 2025; under the reverse charge mechanism the time of supply is the earlier of payment or the statutory period from invoice, so with no invoice or payment in FY 2024-25 the RCM liability arose in April 2025. The tax must be reported and paid in the April 2025 GSTR-3B as inward supplies liable to reverse charge, with eligible ITC claimed in that return; no RCM liability or ITC disclosure is required in the FY 2024-25 GSTR-9. Maintain records justifying delayed invoicing; if payment had been made earlier the date-of-payment rule would alter the timing.