GST E-Invoicing for RCM Self-Invoices: Proposed 2026 Rule Explained

A potentially major change in GST billing and e-invoicing is under discussion ahead of the 57th GST Council meeting scheduled for 12 September 2026.

The proposal relates to supplies received from unregistered persons where the recipient is liable to pay GST under the Reverse Charge Mechanism (RCM).

Under the present system, a registered recipient may be required to issue a self-invoice for specified RCM purchases from an unregistered supplier. However, such inward self-invoices currently do not require generation of an Invoice Reference Number (IRN) through the e-invoice system.

The proposal discussed would potentially bring these self-invoices within the e-invoicing framework, creating a significant new compliance requirement for GST-registered businesses and accountants.

Importantly, this has not yet become law. Businesses should continue following the existing rules unless the GST Council recommends the change and the Government subsequently issues the necessary notification.

What Is Self-Invoicing Under GST?

Under GST, the supplier normally issues the tax invoice.

However, a different situation can arise when:

• The supplier is unregistered;
• The recipient is registered; and
• GST is payable by the recipient under RCM.

In such cases, the registered recipient may have to prepare an invoice itself under Section 31(3)(f) of the CGST Act.

This is commonly known as a self-invoice.

The self-invoice also becomes relevant for documentation supporting the recipient’s RCM liability and, subject to eligibility conditions, subsequent Input Tax Credit.

Current Rule: No E-Invoice for This RCM Self-Invoice

Under the current e-invoicing framework, e-invoicing principally applies to specified documents issued by notified taxpayers for their applicable outward supplies.

The GST e-invoice portal specifically clarifies that where supplies are received:

• From an unregistered person; or
• Through import of services,

e-invoicing presently does not arise.

Therefore, as of now, the recipient may have a self-invoicing requirement under GST without having to generate an IRN for that self-invoice.

The 2026 proposal could change this position.

What Is the Proposed GST Change?

The proposal discussed is to introduce:

E-invoicing for domestic supplies received from unregistered persons where tax is payable under reverse charge, including import of services.

If implemented, a taxpayer covered by the prescribed e-invoicing framework could potentially have to generate an IRN even for certain inward RCM transactions.

This would be a major conceptual change because e-invoicing has largely been associated with documents generated for outward supplies.

Example: GTA Service from an Unregistered Supplier

Consider a GST-registered business receiving a transportation service from an unregistered Goods Transport Agency in a case where the recipient is liable to pay GST under RCM.

Suppose the transportation charge is:

₹1,00,000

Under the applicable RCM provisions, the recipient may have to:

1. Record the transportation expense;
2. Determine the applicable RCM liability;
3. Pay GST through the electronic cash ledger;
4. Prepare the required self-invoice; and
5. Claim eligible ITC after satisfying the applicable conditions.

If the proposed e-invoicing rule is implemented, the self-invoice may additionally need to be uploaded to the Invoice Registration Portal and an IRN may need to be generated.

That would add an entirely new step to the expense-booking process.

Example: Commercial Rent from an Unregistered Landlord

The same practical issue can arise where a registered person takes qualifying commercial premises on rent from an unregistered person and the particular supply is covered by RCM.

At present, the recipient’s compliance can involve:

• Recording rent expense;
• Creating the prescribed self-invoice;
• Paying applicable RCM tax in cash; and
• Claiming eligible ITC.

Under the proposed framework, the required self-invoice could potentially also become an e-invoice requiring an IRN.

Therefore, accountants may eventually have to examine the expense side of the Profit & Loss Account for e-invoicing requirements rather than focusing only on sales invoices.

Import of Services Could Also Be Covered

The proposal reportedly also extends to import of services.

For example, an Indian registered business may purchase a taxable service from a service provider located outside India.

Where the Indian recipient is liable to pay IGST under reverse charge, the transaction currently creates an RCM liability.

The proposed change could potentially require the recipient to generate an e-invoice or prescribed electronic self-invoice for such transactions as well.

This could affect businesses purchasing overseas:

• Software services;
• Consulting services;
• Professional services;
• Technical services;
• Marketing services; and
• Other taxable services.

The precise scope would depend entirely on the final recommendation and notification.

Current E-Invoicing vs Proposed RCM E-Invoicing

Particulars	Current Position	Proposed Position
Applicable outward B2B supplies	E-invoice required for notified taxpayers	Continues
B2C sales	Generally outside e-invoicing	No change indicated
RCM supply from registered supplier	Supplier-side e-invoicing may apply where otherwise covered	Existing framework continues
RCM purchase from unregistered supplier	Self-invoice may be required, but no IRN presently	IRN/e-invoicing proposed
Import of services	No e-invoice currently arises	Proposed to be included
Status	Current law	Proposal only

Why This Could Be a Major Change for Accountants

Today, accountants generally monitor e-invoicing mainly while processing sales and outward supplies.

If this proposal is implemented, accountants may also need to review purchases and expenses continuously.

Potential RCM transactions would need to be identified before or while booking them.

The workflow could become:

Expense → Check Supplier Registration → Check RCM → Create Self-Invoice → Generate IRN → Pay RCM → Claim ITC

For businesses having hundreds or thousands of vendor transactions, this could require substantial changes to ERP and accounting processes.

What About the ₹5 Crore E-Invoicing Threshold?

Under the existing framework, mandatory e-invoicing applies to notified taxpayers based on the prescribed aggregate-turnover threshold, currently ₹5 crore, subject to specified exemptions.

If the proposed RCM change is approved, one of the most important implementation questions will be whether it applies only to taxpayers already covered by the existing e-invoice mandate or whether a separate applicability framework will be prescribed.

Businesses should not assume the answer until the notification is issued.

The Council’s recommendation alone will also not be enough to change compliance software immediately. The legal amendment, notification, effective date and technical IRP implementation will need to be examined.

RCM Tax Must Be Paid in Cash

Another important RCM principle remains unchanged.

GST payable under reverse charge is generally discharged through the electronic cash ledger, rather than by utilising existing Input Tax Credit.

Once the RCM liability has been paid, the recipient can claim ITC where:

• The credit is otherwise eligible;
• The prescribed documentation is available; and
• The other conditions under GST law are satisfied.

A self-invoice is therefore more than an accounting entry. It can be an important supporting tax document for the transaction.

Why Self-Invoice Date Is Important

CBIC has already clarified that for RCM supplies received from an unregistered supplier, where the recipient is required to issue a self-invoice under Section 31(3)(f), the financial year of the self-invoice is relevant for determining the Section 16(4) ITC time limit.

Delayed self-invoicing and delayed payment of RCM tax can also result in interest and potential penal consequences.

Therefore, even before any e-invoicing reform takes place, businesses should ensure that RCM self-invoices are being generated correctly and on time.

Is the New RCM E-Invoicing Rule Applicable Now?

No.

As of 5 September 2026, the 57th GST Council meeting itself has not yet taken place.

The official meeting is scheduled for 12 September 2026, preceded by the officers’ meeting on 11 September.

Further, the official notice announcing the meeting stated that detailed agenda items would be communicated separately.

Therefore, businesses should treat the RCM e-invoicing measure as a proposal under discussion, not an effective GST rule.

What Businesses Should Do Now

Businesses should not start generating IRNs for RCM self-invoices merely because the proposal has been discussed.

Instead:

1. Identify existing RCM transactions.
2. Ensure current Section 31(3)(f) self-invoicing is being followed.
3. Review whether the business already falls within e-invoicing applicability.
4. Identify expenses involving unregistered suppliers.
5. Review imports of services.
6. Wait for the GST Council’s final recommendation.
7. Check the Government notification and effective date before changing ERP systems.

If approved, this could require significant modifications in GST billing software and accounting controls.

FAQs

Is e-invoicing mandatory for RCM self-invoices in 2026?

Not currently. Under the existing system, e-invoicing does not presently arise for inward supplies received from an unregistered person merely because the recipient pays GST under RCM.

What is the proposed change?

The proposal is to introduce e-invoicing for certain domestic supplies received from unregistered persons where the recipient pays GST under RCM, potentially including imports of services.

Does a self-invoice already have to be prepared under GST?

Yes, in applicable cases involving specified RCM supplies from unregistered suppliers, the registered recipient is required to issue a self-invoice under Section 31(3)(f).

Will an IRN have to be generated for rent paid to an unregistered landlord?

Not under the present rule merely because an RCM self-invoice is required. If the new proposal is approved and notified, qualifying transactions may potentially require an IRN depending on the final rules.

Will import of services also come under e-invoicing?

The proposal discussed includes import of services, but the final scope can be confirmed only after the GST Council decision and subsequent notification.

When is the next GST Council meeting?

The 57th GST Council meeting is scheduled for 12 September 2026 in New Delhi. Until the Council decides and the Government formally implements any recommendation, the existing GST e-invoicing rules continue to apply.

Current-Law and Source Note

Status as of 5 September 2026: this remains a reported proposal. The official meeting notice confirms the 57th GST Council meeting date, but the measure will become applicable only if it is recommended and subsequently implemented through the required legal notification and IRP changes.

• IRP FAQ on RCM, unregistered suppliers and import of services
• GST Council meeting information

Related TaxClear Guides

• GST E-Invoicing Rules in 2026: ₹5 Crore Limit and IRN Requirements
• GST E-Invoicing Time Limit from 1 April 2026

For GST registration, RCM, ITC and return-filing support, visit TaxClear GST Services.