Reverse Charge Mechanism Under GST — The Notified List (GTA Freight, Legal, Security, Director, Rent from Unregistered Landlords, Metal Scrap, Imports of Services), Section 9(4) Today, Time of Supply, Self-Invoicing Within 30 Days, Paying in Cash and Claiming the Credit, and the Accounting Entries

Normally the supplier collects GST and pays it to the government. Under reverse charge the recipient pays the tax directly — either because the supply is on the notified list under section 9(3) of the CGST Act (and section 5(3) of the IGST Act), or, under section 9(4), because a notified class of registered recipients buys specified goods or services from unregistered suppliers. The recipient pays the tax in cash through GSTR-3B Table 3.1(d), and if the supply is used for business, takes credit of the same amount in Table 4 of the same return — the net cash cost is nil for a fully taxable business, but the compliance is mandatory and interest runs on any RCM paid late.

• •The blanket 2017 rule — every purchase from an unregistered supplier taxable in the buyer's hands — was suspended from 13 October 2017 and replaced from 1 February 2019 by a narrow version: only notified classes of registered persons pay RCM on notified goods and services from unregistered suppliers.
• •The only class notified so far is real-estate promoters: cement bought from unregistered suppliers, capital goods, and the shortfall below the 80% registered-purchase requirement for residential projects, plus development rights and FSI.
• •For everyone else, buying from an unregistered vendor carries no GST — but the vendor's turnover may itself exceed the threshold, and the expense still needs a proper voucher for income-tax purposes.
• •Reverse charge and composition: a composition dealer pays RCM at the normal rate on notified supplies and gets no credit of it.

1. 1Time of supply — services: the earlier of the date of payment or 60 days from the supplier's invoice date; goods: the earlier of receipt, payment or 30 days from invoice. If the supplier is unregistered, the date you raise the self-invoice governs.
2. 2Self-invoice: rule 47A (from 1 November 2024) requires the recipient to issue a tax invoice within 30 days of receiving a supply from an unregistered person; also issue a payment voucher on payment. For registered suppliers (advocate firms, GTA with GSTIN), their invoice marked 'tax payable under reverse charge' suffices.
3. 3Report and pay in GSTR-3B Table 3.1(d) in the month of the time of supply; the liability can be discharged only from the electronic cash ledger.
4. 4Claim credit in Table 4(A)(3) of the same GSTR-3B (import of services in 4(A)(2)) if the supply is used for business and not blocked under section 17(5); a self-invoice supports credit only if the tax has actually been paid.
5. 5Late payment: interest at 18% from the due date; credit claimed late is subject to the section 16(4) time limit but a self-invoice issued late (after the 30 days) is penalised under section 122.