CBIC notifies Time Limit for Issuance of GST Invoices for Supplies from Unregistered Persons under RCM

The Central Board of Indirect Taxes and Customs ( CBIC ), through Notification No. 20 /2024-Central Tax (Rate), notified the Time Limit for issuance of Goods and Services Tax  ( GST ) Invoices for Supplies from Unregistered Persons under Reverse Charge Mechanism  ( RCM ).

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The Central Government, on the recommendations of the Council, notified the said rules, after rule 47, the following rule shall be inserted with effect from the 1st day of November, 2024, namely:-

“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.”.

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As per the present GST law, when a registered person receives supplies from an unregistered person and is liable to pay tax under RCM, they are required to issue a self-invoice with a payment voucher and comply with section 13(3) of the Central Goods and Services Tax Act, 2017 (the CGST Act), which specifies the time of supply of services where the invoice is required to be issued by the recipient of services from unregistered supplier in RCM.

CBIC vide Circular No. 211/5/2024-GST dated June 26, 2024 provides clarifications on the time limit under sec 16(4) of the CGST Act, specifically regarding RCM supplies received from unregistered persons. The circular clarified that for such supplies, the relevant financial year for calculating the time limit for availing Input Tax Credit will be the financial year in which the invoice has been issued by the recipient under Section 31(3)(f) of the CGST Act subject to payment of tax on the said supply by the recipient and fulfilment of other conditions and restrictions of Section 16 and 17 of CGST Act. In case, the recipient issues the invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax. Further, in cases of such delayed issuance of invoice by the recipient, recipient may also be liable to penal action under the provisions of Section 122 of the CGST Act.

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As the new rule becomes effective from November 01, 2024, it will provide a 30-day time limit for issuing tax invoices by recipients liable to pay tax under RCM for supplies received from unregistered persons. The amendment clarifies the timeline for recipients to issue invoices in compliance with Section 31(3)(f) of the CGST Act, streamlining the process and ensuring better tax administration.

The new amendment can enhance accountability and help reduce tax-related delays.

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