RCM under ISD

[Bhavesh Suthar]

With regard to reverse charge transaction under ISD, kindly confirm below procedure:

1) Invoice dated April '25 issued by supplier on normal registration (RCM).

2) RCM liability discharged by normal registration on 20th May '25.

3) Normal registration raises tax invoice to ISD to transfer RCM ITC to ISD in May'25. This is disclosed in GSTR-1 of May '25 in B2B.

4) ISD distributes the credit to its branches vide GSTR-6 of May '25.

Query 1: Supplier raises invoice to normal registration and not ISD. Is that correct.

Query 2: Normal registration raises invoice to ISD post payment in 3B (i.e. GSTR-1 of May'25). Can this be done in April '25 GSTR-1 itself simultaneously with the liability payment or does it have to be done post payment only in May '25.

AI Summary

ISD constituent: supplier invoices registered entity; that entity pays RCM, issues tax invoice to transfer ITC in same GST period. Under reverse-charge supplies where the recipient is an ISD constituent, the supplier invoices the recipient's normal registered entity (not the ISD), that entity discharges the RCM liability and then issues a tax invoice to the ISD to transfer the resultant ITC. The invoice/transfer should be recorded in the GST period when the RCM tax is discharged; therefore if RCM is paid in May 2025, the outward supply to the ISD and disclosure in GSTR-1 should be in the May 2025 return and then distributed via GSTR-6 in May.