RCM under Input Service Distributor (2025)

[Raghav Mehra]

Queries on RCM under ISD

E.g. Regular Taxpayer (RT) is in UP and ISD is in UP also, RT has received legal services from lawyer in Delhi in July 25

so, RCM is applicable accordingly

RT has paid IGST under RCM in July 25 GSTR-3B and availed ITC also.

Now in Aug 25, this ITC is to be transferred to ISD

Please confirm the below points:

1. Credit transfer Invoice (CTI) [No E-Invoice] is to be prepared to transfer ITC to ISD, but in that tax would be CGST/SGST as ISD and RT both are in UP
2. This invoice would be added in RT GSTR-1 of Aug 25 in B2B to flow the ITC to GSTR-6A
3. In RT GSTR-3B the ITC claimed in July 25 (IGST) would be reversed.

[Shilpi Jain]

Once the RT pays GST under RCM, the same GST gets billed to ISD - e-invoice to be issued as it is a regular tax invoice.

No reversal of any ITC is required in RT registration.

[Raghav Mehra]

Thankyou for Answering,

but E-Invoice is only mandatory for outward supply but this is not an o/w sup

AI Summary

Reverse Charge Mechanism billed to ISD may require e invoice; credit transfer and reversal treatment remain contested. Once tax is discharged by the recipient under the Reverse Charge Mechanism, that tax is to be billed to the ISD and treated as a regular tax invoice requiring e invoicing, and no reversal of the recipient's claimed ITC in its registration is necessary; the e invoicing requirement for such internal credit transfer is contested by the recipient.