Rule 47A of the CGST Rules – Effective from 1st November 2024

by Mr. B. Venkateswaran IRS., Assistant Commissioner Central GST, (Retired)

The Central Board of Indirect Taxes and Customs (CBIC) has introduced Rule 47A via Notification No. 20/2024 – Central Tax, which will come into effect from November 1, 2024. This new rule introduces a 30-day time limit for issuing tax invoices in cases where recipients are liable to pay tax under the Reverse Charge Mechanism (RCM).

Key Provisions of Rule 47A

• If a registered person is required to issue a tax invoice under Section 31(3)(f) of the CGST Act, i.e., when the tax liability is on the recipient under Section 9(3) or 9(4) of the CGST Act, the invoice must be issued within 30 days from the receipt of goods or services.
• Rule 47A applies to transactions where the supplier is unregistered or where RCM applies (such as services provided by advocates or goods purchased from unregistered suppliers).

Non-compliance Consequences:

• If the 30-day timeline is not adhered to, businesses may face interest and penalties for non-compliance.

Explanation of Relevant Sections of the CGST Act, 2017

1. Section 31(3)(f) – Requirement to Issue Self-Invoice in RCM Cases:
   • This section mandates that when a registered recipient of goods or services is liable to pay tax under the Reverse Charge Mechanism (RCM), the recipient must issue a self-invoice.
2. Section 9(3) – Reverse Charge on Notified Goods and Services:
   • This section provides for Reverse Charge Mechanism (RCM) on specific categories of goods and services, which are notified by the government.
   • In these cases, the recipient of the goods or services is liable to pay GST instead of the supplier. Examples include:
     • Legal services from advocates
     • Services provided by transportation agencies
     • Purchase of certain goods such as cashew nuts from agriculturists
3. Section 9(4) – Reverse Charge on Purchases from Unregistered Persons:
   • This section applies when a registered person purchases goods or services from an unregistered supplier.
   • In such cases, the registered recipient must pay GST under RCM and generate a self-invoice to record the transaction and pay the applicable tax.
4. Section 13 – Time of Supply for Services under RCM:
   • Section 13(3) specifies that the time of supply for services under RCM will be the earlier of:
     • The date of payment (recorded in the recipient’s books or when debited in the bank)
     • 60 days from the invoice date (if issued by the supplier)
     • The date of issuing the self-invoice (if applicable)

List of services under the Reverse Charge Mechanism (RCM) in GST as of October 2024:

1. Goods Transport Agency (GTA): Transport of goods by road from a GTA to various entities such as factories, societies, and partnership firms (except government departments registered for tax deduction only).
2. Legal Services: Services by individual advocates or law firms to business entities, including representational services.
3. Arbitral Tribunal Services: Services provided by arbitral tribunals to businesses.
4. Sponsorship Services: Sponsorships given to corporate bodies or partnership firms.
5. Director’s Services (Non-remunerative): Services provided by directors to the company or corporate body.
6. Insurance and Recovery Agent Services:
   • Insurance agent services to insurance businesses.
   • Recovery agent services to financial institutions, including banks and NBFCs.
7. Government Services to Business Entities: Services (excluding postal, passenger, and goods transport services) offered by central or state governments to businesses. Rental services of immovable property by the government are also under RCM.
8. Transfer of Development Rights and Long-Term Lease:
   • Transfer of Floor Space Index (FSI) and development rights to promoters.
   • Long-term lease of land (30 years or more) for construction projects by promoters.
9. Copyright Services: Transfer of copyrights by artists, authors, composers, and photographers to publishers, producers, or music companies.
10. Direct Selling Agents (DSAs): Services provided by individual DSAs to banks or NBFCs.
11. Business Facilitator and Correspondent Services:
    • Services by business facilitators to banks.
    • Agents of business correspondents offering services to correspondents.
12. Security Services: Security personnel services provided to registered persons, with certain exclusions for government entities.
13. Motor Vehicle Rental: Rental of motor vehicles with fuel costs included, supplied by non-corporate entities to corporate bodies.
14. Securities Lending: Lending of securities under the SEBI Securities Lending Scheme to borrowers through intermediaries.
15. Recent Addition: Rental of immovable property (excluding residential dwellings) by unregistered persons to registered entities from October 10, 2024

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Sample Format for Self-Invoice under RCM

Self-Invoice
(Issued as per Rule 36(1) of the CGST Rules, 2017)

Invoice No.: ………………..
Date: ………..

Supplier Name: Unregistered Supplier
Address: [Supplier’s Address]
GSTIN: Not Applicable

Reverse Charge Applicable: Yes

Recipient Name: [Recipient’s Business Name]
Recipient Address: [Recipient’s Address]
GSTIN: [Recipient’s GSTIN]

Description	HSN/ SAC Code	Value	Taxable Value	Rate of GST	CGST	SGST/ UTGST	IGST

Total Invoice Value: …………………

Declaration:
This invoice has been generated by the recipient under Section 31(3)(f) of the CGST Act, 2017, as the supplier is not registered under GST, and the tax liability has been discharged under RCM.

Signature of the Authorised person.