TaxTMI 
TaxTMI 
RCM under ISD
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....CM under ISD<br> Query (Issue) Started By: - Bhavesh Suthar Dated:- 14-5-2025 Last Reply Date:- 25-6-2025 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>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.....
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.... 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'....
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....;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. Reply By Shilpi Jain: The Reply: Since ISD cannot make RCM payment, the invoice by supplier to be issued to the normal registration. This is also in line with the existing provisions. Invoice to the ISD registration can be made in Apr '....
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....25 itself. Reply By YAGAY andSUN: The Reply: Let's break down your queries step by step in the context of GST reverse charge mechanism (RCM) and ISD (Input Service Distributor) procedures. Query 1: Supplier raises invoice to normal registration and not ISD. Is that correct? Yes, this is correct. * Under the reverse charge mechanism (RCM), the normal registered taxpayer (i.e., the recipie....
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....nt of the goods or services) is responsible for paying the GST, not the supplier. * The supplier raises an invoice to the normal registration (which is the recipient in this case), not directly to the ISD. * The ISD is involved in distributing the input tax credit (ITC) among its branches but does not directly deal with the supplier in this case. The ISD comes into play only after the RCM is d....
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....ischarged and ITC needs to be transferred. So, the supplier issues an invoice to the normal taxpayer (who is liable to discharge the RCM) and not to the ISD. 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 Ma....
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....y '25? In the reverse charge scenario, the procedure is typically as follows: * RCM liability is paid through GSTR-3B when the payment is made. * The supplier's invoice is accounted for in the GSTR-1 of the month in which the reverse charge liability is paid (in this case, the payment is made in May). Now, regarding the question of when the normal registration can raise the invoice t....
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....o ISD to transfer the ITC: * The normal registration can raise the invoice to ISD only after the RCM liability is discharged. This is because the normal taxpayer (the recipient) must have already paid the GST and claimed ITC for that period (in this case, the period for payment would be May). * The invoice to ISD will typically be reported in May's GSTR-1 because that is the month the liab....
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....ility is paid, and the ITC needs to be transferred to the ISD at that point. In short, the invoice to ISD cannot be raised in April's GSTR-1 because the RCM liability hasn't been paid yet. It must be done after the payment is made, which is in May's GSTR-1. Summary: * Supplier raises invoice to normal registration and not ISD - this is correct. * Invoice to ISD can only be raised....
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.... post-payment of the RCM liability, so it should be reflected in May's GSTR-1 (not April's GSTR-1). *** Reply By Ganeshan Kalyani: The Reply: I agree with the view of expert Reply By KARISHMA CHAWLA: The Reply: Can invoice be generated to transfer the RCM Credit to ISD in April month itself ? The next comment looks more logical - RCM tax becomes our credit only after payment of such ....
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....liability in the return-filing month, so then thereafter only it should be transferred to ISD in May 25 that too post 20th May 2025. Please guide on the reasons maam<br> Discussion Forum - Knowledge Sharing ....