Summary: Notification No. 04/2026–Central Tax, dated 26 October 2026, extends the GST e-invoicing framework to specified inward supplies from 1 January 2027. Registered recipients covered by the existing turnover threshold must generate e-invoices for supplies received from unregistered persons where tax is payable under reverse charge and for imports of services. The amendment operates through Notification No. 13/2020–Central Tax and does not alter the existing threshold of aggregate turnover exceeding ₹5 crore in any financial year from 2017-18 onwards. Existing exclusions also continue to apply. The amendment connects the existing self-invoicing obligation under Section 31(3)(f) of the CGST Act with the electronic reporting mechanism under Rule 48(4). Rule 47A requires eligible recipients to issue self-invoices within thirty days of receiving goods or services. Separately, GSTN’s portal restriction prevents taxpayers with turnover of ₹10 crore or more from reporting covered e-invoices older than thirty days. These requirements operate independently and have different starting points. Non-compliance may affect the legal recognition of the invoice under Rule 48(5), creating potential disputes concerning input tax credit under Section 16 and Rule 36(1)(b). However, the reverse charge tax liability remains payable irrespective of whether an Invoice Reference Number is generated. Businesses should review their historical turnover, identify affected RCM transactions, update accounting systems, test the RCMDOM and RCMIMP functionalities, and establish controls for timely invoice generation and reporting.
E-Invoicing Reaches the Recipient: Notification No. 04/2026–Central Tax and the Self-Invoice under Reverse Charge
An analysis of G.S.R. 918(E) dated 26 October 2026, read with sections 9(3), 9(4) and 31(3)(f) of the CGST Act, 2017, Rules 47A and 48 of the CGST Rules, 2017, and the GSTN advisories on the thirty-day reporting limit
| At a Glance The amendment takes effect on 1 January 2027 and applies to registered persons whose aggregate turnover exceeds five crore rupees in any financial year from 2017-18 onwards.
It brings into e-invoicing the self-invoice raised for supplies received from an unregistered person on which the recipient pays tax under reverse charge, and the invoice for import of services. Imports of goods are not covered. Two thirty-day periods are involved. Rule 47A gives thirty days from receipt of the supply to issue the self-invoice. Separately, the portal will not accept an e-invoice older than thirty days where the taxpayer’s turnover is ten crore rupees or more, under a GSTN advisory. Under Rule 48(5), a self-invoice that is not issued through the portal is not to be treated as an invoice, which puts the input tax credit on the reverse charge supply at risk. GSTN opened sandbox testing for the new supply types, RCMDOM and RCMIMP, on 16 October 2026. The production date has not been announced. |
- 1. Introduction
- 2. What the Notification Does
- 3. The Statutory Setting
- 3.1 Who pays the tax
- 3.2 Who issues the invoice, and by when
- 3.3 In what manner the invoice is issued
- 4. Who Is Caught
- 4.1 The class and the threshold
- 4.2 The exclusions
- 4.3 The scope of the new limbs
- 5. The Two Thirty-Day Periods
- 5.1 The statutory period under Rule 47A
- 5.2 The operational period under the GSTN advisories
- 5.3 How the two periods combine
- 6. Consequences of Default
- 7. Questions Still to Be Answered
- 8. A Practical Plan
- 9. Concluding Observations
1. Introduction
E-invoicing under the GST law has so far been a supplier’s obligation. A notified supplier uploads the particulars of a business-to-business or export invoice to an Invoice Registration Portal (IRP), receives an Invoice Reference Number (IRN), and only then is the document treated as an invoice. The recipient has been a bystander in that process. Notification No. 04/2026–Central Tax, issued on 26 October 2026 as G.S.R. 918(E), changes this for a class of transactions in which the recipient is itself the person who must raise the invoice. With effect from 1 January 2027, supplies received from unregistered persons on which the recipient pays tax under reverse charge, and imports of services, come within the e-invoicing mandate.
The amendment is short and plainly drafted, but it raises questions that taxpayers and their advisers will have to settle before the commencement date. Who is actually caught? What do the two thirty-day periods mean for a document that the taxpayer prepares for itself? What becomes of the input tax credit if the document is not reported? This article sets out the amendment, places it within the scheme of sections 9 and 31 of the CGST Act, 2017 and Rules 46, 47A and 48 of the CGST Rules, 2017, examines the time limits, and closes with the issues that remain open and a practical plan of action.
2. What the Notification Does
Notification No. 13/2020–Central Tax, dated 21 March 2020, is the instrument made under sub-rule (4) of Rule 48 that identifies the class of registered persons who must prepare their invoices through the IRP. By Notification No. 04/2026, the Government, on the recommendation of the GST Council, has substituted the closing words of the first paragraph of that notification, which describe the supplies in respect of which the invoice is to be prepared.
| Words in paragraph 1 of Notification No. 13/2020–Central Tax | |
|---|---|
| Before | “in respect of supply of goods or services or both to a registered person or for exports” |
| On or After 1 January 2027 | “in respect of,(i) supply of goods or services or both to a registered person; or
(ii) supply of goods or services or both for exports; (iii) supply of goods or services or both received from an unregistered person where the tax is payable on reverse charge basis by the recipient of such goods or services or both; or (iv) import of services” |
Three features of the amendment should be noticed at the outset.
- It is prospective. The amendment comes into force on 1 January 2027 and not on the date of issue, which leaves taxpayers a little over two months to prepare.
- It alters only the description of the supplies. The turnover test, which looks at any preceding financial year from 2017-18 onwards, the threshold of five crore rupees fixed by Notification No. 10/2023–Central Tax, and the persons excluded from the class all continue as before.
- Two of the four limbs are new. Limbs (i) and (ii) restate the existing position for outward supplies and exports. Limbs (iii) and (iv) are the real change, because they apply to inward supplies, for which the document is prepared by the recipient.
3. The Statutory Setting
The notification does not create a new duty to issue a self-invoice. It attaches the e-invoicing mechanism to a duty that already exists, and it is best understood by separating three questions: who pays the tax, who issues the invoice and by when, and in what manner the invoice is issued.
3.1 Who pays the tax
Section 9(3) of the CGST Act empowers the Government to notify categories of supply on which tax is paid by the recipient instead of the supplier, and it applies whether or not the supplier is registered. Section 9(4) deals with supplies by an unregistered supplier to a registered person, and since 1 February 2019 it operates only for the supplies and the class of recipients that the Government has notified. Sections 5(3) and 5(4) of the IGST Act are the inter-State counterparts. An import of services is taxed under section 5 of the IGST Act, and the recipient pays the integrated tax under reverse charge.
3.2 Who issues the invoice, and by when
Section 31(3)(f) requires a registered person who is liable to pay tax under section 9(3) or 9(4) to issue an invoice in respect of goods or services received from a supplier who is not registered. The Finance (No. 2) Act, 2024 made two changes to the clause with effect from 1 November 2024. It added the words “within the period as may be prescribed”, and it added an Explanation under which a supplier who is registered solely for deduction of tax at source under section 51 is treated as an unregistered supplier. Section 31(3)(g) separately requires a payment voucher at the time of payment to the supplier.
The prescribed period was supplied by Rule 47A of the CGST Rules, inserted by Notification No. 20/2024–Central Tax with effect from 1 November 2024. It requires the registered person liable to pay tax under section 9(3) or 9(4) to issue the invoice within thirty days from the date of receipt of the goods or services. Rule 46, which prescribes the particulars of a tax invoice, also has a proviso that allows a consolidated month-end invoice for specified low-value purchases under section 9(4).
3.3 In what manner the invoice is issued
Sub-rule (4) of Rule 48 provides that a notified class of registered persons shall prepare the invoice by uploading the particulars in FORM GST INV-01 to the IRP and obtaining an IRN. Sub-rule (5) adds that an invoice issued by such a person otherwise than in that manner shall not be treated as an invoice. The class is not named in the Rule. It is fixed by notification, and that is why Notification No. 13/2020 is the instrument that matters.
A threshold question is whether a self-invoice is an “invoice” to which Rule 48(4) can apply at all. The answer is yes. Rule 47A itself describes the document as an invoice referred to in Rule 46 that is required to be issued under section 31(3)(f), and Rule 46 is the same provision on which the whole of Rule 48 operates. The notification therefore does not stretch the rule. It uses the power the rule already gives, and the provisions of the CGST Act on invoicing are applied to integrated tax by section 20 of the IGST Act, which is how the same machinery reaches an import of services.
Read together, the provisions divide the work in an orderly way. Sections 9 and 5 decide who bears the tax. Section 31(3)(f) and Rule 47A decide who issues the invoice and by when. Notification No. 13/2020, as now amended, decides whether that invoice must be an e-invoice. Rule 48(5) decides what follows if it is not.
4. Who Is Caught
4.1 The class and the threshold
The class is the one already fixed by the parent notification, namely a registered person whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds five crore rupees. Aggregate turnover is computed on an all-India basis for all registrations under one PAN, and the value of inward supplies on which tax is payable under reverse charge is not counted in it. A business that is already within the e-invoicing net for its sales is therefore within it for these purchases as well, and a business outside it does not come in through the new limbs.
One point of drafting deserves attention. The Council’s recommendation and the GSTN advisory refer to turnover of five crore rupees “and above”. The notification uses neither those words nor that test. It retains the word “exceeds” from the parent notification, and so, on its text, a person whose aggregate turnover is exactly five crore rupees remains outside the class. Where a case turns on that margin, it is the notification, and not the press release or the advisory, that governs.
4.2 The exclusions
Paragraph 1 of the parent notification leaves out government departments, local authorities, units in a Special Economic Zone, and the persons referred to in sub-rules (2), (3), (4) and (4A) of Rule 54, which broadly cover the insurance and banking, goods transport agency, passenger transport and cinema categories. The amending notification does not disturb that list. On a plain reading the exclusions continue to apply to limbs (iii) and (iv), so that a bank or an SEZ unit that imports services would carry on with its existing self-invoicing procedure.
4.3 The scope of the new limbs
The new limbs are narrower than they may first appear. Limb (iii) requires two conditions to be met together: the supplier must be unregistered, and the recipient must be liable to pay the tax under reverse charge. A purchase from an unregistered supplier on which the law imposes no reverse charge liability does not call for a self-invoice, and so does not call for an e-invoice. Where a notified category under section 9(3) is supplied by a registered person, the supplier issues the invoice and the recipient has nothing to report under this limb. Limb (iv) is confined to import of services. Goods imported from abroad are cleared on a bill of entry under the Customs Act and lie outside it.
The table below applies these principles to common transactions. It assumes that the recipient is within the class.
| Transaction | Who issues the invoice | Position from 1 January 2027 | Limb |
|---|---|---|---|
| Legal services from an individual advocate who is not registered, where tax is payable by the recipient under section 9(3) | The recipient, as a self-invoice under section 31(3)(f) | E-invoice required | (iii) |
| The same services from a registered advocate or firm of advocates | The supplier | No self-invoice. The recipient has nothing to report | Not applicable |
| Software or cloud subscription from a vendor located outside India | The recipient, for an import of services | E-invoice required | (iv) |
| Purchase from an unregistered supplier on which no reverse charge liability arises | No invoice by the recipient is required under section 31(3)(f) | No change | Not applicable |
| Import of goods | Bill of entry under the Customs Act | Outside the notification | Not applicable |
| Any of the above, where the recipient is an SEZ unit, a government department, a local authority or a person covered by Rule 54(2) to (4A) | As at present | Excluded, on a plain reading of paragraph 1 | Not applicable |
5. The Two Thirty-Day Periods
Two different periods of thirty days will bear on a self-invoice, and they should not be confused. One is a rule of law. The other is a rule of the portal.
5.1 The statutory period under Rule 47A
Rule 47A runs from the date of receipt of the goods or services, and it requires the self-invoice to be issued within thirty days of that date. It applies to every registered person liable under section 9(3) or 9(4), whatever the turnover and whether or not the invoice is an e-invoice. It is a mandatory provision of the Rules and a failure to observe it is a default in its own right.
5.2 The operational period under the GSTN advisories
The second period comes from GSTN and not from the statute. By an advisory dated 13 September 2023, GSTN prevented the IRP from accepting an e-invoice that was more than thirty days old, for taxpayers with aggregate turnover of one hundred crore rupees or more. By a further advisory dated 5 November 2024, it lowered the turnover to ten crore rupees, with effect from 1 April 2025. The restriction applies to all document types for which an IRN is to be generated, which includes credit notes and debit notes, and the advisory states that taxpayers below ten crore rupees are not subject to it. It is a validation built into the portal. It is not found in the Act, the Rules or the notification.
5.3 How the two periods combine
The periods have different starting points and different sources. For a taxpayer with turnover of ten crore rupees or more they run in sequence, as the following illustration shows.
1. Services are received from an unregistered supplier on 1 February 2027.
2. Under Rule 47A the self-invoice must be issued by 3 March 2027.
3. If the invoice is issued on that last day, the IRP will accept it for about another thirty days, that is, until about 2 April 2027.
The dates are given for illustration. How the days are counted should be confirmed when GSTN publishes the technical guidelines. For a taxpayer whose turnover is between five and ten crore rupees, only the Rule 47A period applies at present.
Two cautions follow. First, the published material on the new facility does not say whether the portal’s thirty-day restriction will be applied to documents of the RCMDOM and RCMIMP types. The advisory’s reference to all document types suggests that it will, and it is prudent to assume so until GSTN says otherwise. Second, because the restriction works through validation, a self-invoice that misses the window cannot be reported at all. Read with Rule 48(5), that leaves the taxpayer without a remedy on the portal. The safer course is to treat the Rule 47A period, and not the portal period, as the working deadline.
6. Consequences of Default
The liability to pay tax under section 9(3) or 9(4) of the CGST Act, or under section 5(3) of the IGST Act in the case of an import of services, and it must be discharged in cash whether or not an IRN has been obtained. What the IRN affects is the standing of the document.
The first consequence is that stated in Rule 48(5). An invoice issued by a person within the class, otherwise than through the portal, is not to be treated as an invoice. From 1 January 2027, a recipient within the class that raises a self-invoice without an IRN is exposed to that consequence.
The second consequence concerns credit. The recipient claims input tax credit on a reverse charge supply on the strength of its own invoice issued under section 31(3)(f), subject to payment of tax, as Rule 36(1)(b) provides. If the self-invoice is not an invoice for want of an IRN, the document on which the credit rests can be questioned. The notification does not say so in terms, and it contains no saving or transitional relief. A recipient that has paid the tax in cash and holds a complete self-invoice and payment voucher would argue that the substantive conditions of section 16 are satisfied, and that credit should not be denied for a lapse in the manner of issue. That is an argument of principle and not a settled position, and Rule 48(5) is worded in terms that leave limited room for it. The payment voucher under section 31(3)(g) is a separate requirement and is not affected by the amendment.
The third consequence is penal. The department may be expected to look to section 122 and to the general penalty under section 125. Whether clause (i) of section 122(1), which is framed around a person who supplies goods or services without issuing an invoice, can be applied to a recipient’s failure to issue or report a self-invoice is open to argument, and a taxpayer facing such a proposal would have a respectable answer on the text.
7. Questions Still to Be Answered
The notification settles the legal basis, but a number of practical points remain open. None of them has been addressed in the material published so far.
- Receipts before, and invoices after, 1 January 2027. A service received on 20 December 2026 may be self-invoiced on 5 January 2027 and still be within Rule 47A. Whether the new obligation turns on the date of receipt or on the date of the self-invoice is not stated. The words “shall prepare invoice” point towards the date of the invoice.
- Suppliers registered only for deduction of tax at source. For section 31(3)(f), the Explanation treats such a supplier as unregistered. Limb (iii) speaks of an “unregistered person” without that Explanation, and whether such suppliers fall within RCMDOM needs to be clarified.
- Consolidated month-end invoices. The proviso to Rule 46 permits a consolidated invoice for specified low-value purchases. It is not clear how one consolidated document will be reported when the portal is built around a single IRN for each invoice.
- Registrations under one PAN. The turnover test is applied at the level of the PAN, but the self-invoice is raised by the registration that receives the supply. A branch with small turnover of its own may therefore be within the class, and accounting systems will have to apply the test accordingly.
- Return mapping. It has not been said how an RCM e-invoice will flow into the monthly returns, or how it will be matched with the tax paid and the credit claimed.
8. A Practical Plan
The following steps are suggested, in this order, for a taxpayer that may be within the class.
1. Test the class. Check turnover in each year from 2017-18 against the threshold, at the level of the PAN, and confirm that none of the exclusions applies.
2. Map the transactions. List every purchase on which tax is paid under reverse charge. Separate supplies from unregistered suppliers under sections 9(3) and 9(4) from imports of services, such as software and cloud subscriptions, foreign professional fees and intra-group charges.
3. Record the date of receipt. Rule 47A runs from receipt. Move the issue of self-invoices from a month-end exercise to a continuing one, so that no document approaches the thirty-day limit.
4. Prepare the system. Ask the ERP or accounting vendor when RCMDOM and RCMIMP will be supported, and test self-invoices in the sandbox before production begins.
5. Keep the supporting trail. For every self-invoice, retain the payment voucher and the proof of cash payment of tax, because credit will depend on them as well as on the IRN.
6. Watch for further instruments. Follow the production date, the technical guidelines and any transitional notification, and revisit the process as each one issues.
9. Concluding Observations
The evident purpose of the amendment is visibility. A self-invoice raised by the recipient has so far existed only in the recipient’s own books, and the department could see it only when it examined those books. Once the document is reported to the IRP, it can be seen at the level of the individual invoice and compared with the returns. The purpose is a legitimate one, and the choice of the existing five crore rupee threshold keeps the change within the population that has already built e-invoicing into its systems.
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This article summarises the law as notified on the date shown and is not a substitute for advice on the facts of a particular case.
