Reverse Charge Mechanism (RCM) under GST

[DS Pal]

Dear Experts,

We are receiving services of renting of immovable property from unregistered person against which we are liable to pay GST under RCM.

Let suppose, we have made an advance payment to supplier on 08/04/2025 as rent for the month of April 2025. Whether we have to do record RCM on payment voucher recorded in books on 08/04/2025?

However, the unregistered supplier is submitting an invoice for April 2025 to us during the month of May 2025 (Let say 02/05/2025).

Now, what will be the time limit for issuing self-invoice against such transaction?

Further, On which date/entry, RCM liability to be recorded in books i.e. on the date on which payment has been made to supplier (08/04/2025) or date of self-invoicing?

 

Thanks

[Ganeshan Kalyani]

Sec. 13(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:––

(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

[Shilpi Jain]

RCM liability will arise on making payment of the rent i.s. in returns of Apr '25. RCM liability to be recorded in the books on which payment of rent is done. 

Self invoice to be issued within 30 days from date of receipt of service.

[KASTURI SETHI]

RULE [47A. Time limit for issuing tax invoice in cases where recipient is required to issue invoice. - Notwithstanding anything contained in rule 47, where an invoice referred to in rule 46 is required to be issued under clause (f) of sub-section (3) of section 31 by a registered person, who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, he shall issue the said invoice within a period of thirty days from the date of receipt of the said supply of goods or services, or both, as the case may be.]

[DS Pal]

Thak you for your valuable solutions.

Also let us know, in next month i.e. May 2025 when i record self-invoice in our books of accounts, should i booked RCM GST amount again in such entry as Self invoice is inclusive of RCM GST?

[YAGAY andSUN]

In the case where your company is receiving renting of immovable property services from an unregistered person and you are liable to pay GST under reverse charge mechanism (RCM), the time of supply as per Section 13(3) of the CGST Act will be the earlier of the date of payment or 60 days from the date of invoice. Since you made the advance payment on 08/04/2025, RCM liability arises on that date itself, regardless of when the invoice is received from the unregistered supplier. Accordingly, RCM liability must be booked in April 2025, and reported in the GSTR-3B return for April. As per Rule 47A, you are required to issue a self-invoice within 30 days from the date of receipt of the service, which in this case is considered as April 2025 since the rent pertains to that month and payment has been made. Therefore, the self-invoice should be issued on or before 08/05/2025. When you pass the self-invoice entry in May 2025, you should not book the RCM liability again in the books, as the liability has already been recognized on 08/04/2025 when the payment was made. The self-invoice entry in May should only serve documentation and compliance purposes and should not duplicate the RCM accounting already done in April.

[DS Pal]

We are very thankful to you sir.

[KASTURI SETHI]

After in agreement with the experts, I further opine that under RCM  recipient of service is a deemed service provider (supplier).

[Sadanand Bulbule]

I endorse all replies.