Many headlines say that e-invoicing is now mandatory for reverse charge (RCM) invoices. The change is real, but it is narrower than that. A notification dated 26 October 2026 extends e-invoicing to the self-invoices that a business raises for certain reverse charge purchases, starting from 1 January 2027. This note explains who is affected, what is covered and what to do before the date.
Key points at a glance
- Notification: reported as Notification No. 04/2026-Central Tax, dated 26 October 2026. It amends Notification No. 13/2020-Central Tax, which lists the transactions covered by e-invoicing under rule 48(4) of the CGST Rules.
- From when: 1 January 2027.
- What is added: self-invoices for supplies received from unregistered persons where the recipient pays GST under reverse charge, and self-invoices for import of services.
- What is not covered: import of goods.
- Who it affects: only businesses that are already required to issue e-invoices. Reports say the turnover limit of ₹5 crore is unchanged. The notification widens the documents covered, not the businesses covered.
Background: how e-invoicing works today
Under rule 48(4) of the CGST Rules, a registered person whose turnover is above the notified limit must prepare invoices for supplies to registered persons (B2B) and for exports by uploading the invoice details to the Invoice Registration Portal and getting an Invoice Reference Number (IRN) and a QR code. Notification No. 13/2020-Central Tax lists the categories that are exempt. Rule 48(5) says an invoice issued in any other manner by a person to whom rule 48(4) applies is not treated as an invoice.
The consequences of not following the e-invoicing procedure are already well known. The recipient is not eligible to claim input tax credit (ITC) if an e-invoice was required but not generated by the supplier, and the supplier faces penalty provisions under section 122. The tax invoice must also state whether tax is payable on reverse charge.
What changes from 1 January 2027
Until now, e-invoicing mainly covered a business’s outward supplies. When you buy from an unregistered supplier and pay GST under reverse charge, you issue the invoice to yourself (a self-invoice). When you import a service and pay GST under reverse charge, you also account for it through a self-invoice. From 1 January 2027, if you are an e-invoicing taxpayer, these two kinds of self-invoice must be reported on the Invoice Registration Portal so that an IRN is generated.
GSTN has also introduced a self-invoice facility on the portal, with separate document categories for domestic RCM purchases from unregistered persons and for import of services, so you can generate the IRN for these documents.
Who is affected and who is not
- Affected: businesses already required to issue e-invoices (reported limit: aggregate turnover above ₹5 crore) that buy from unregistered suppliers under reverse charge, or that pay for services from overseas, such as consulting, software, cloud or licensing fees.
- Not affected: businesses below the e-invoicing limit, and importers of goods. This is the position as reported. Check the exact wording of the notification for your case.
- Already in e-invoicing: if you already issue e-invoices for your sales, you will now also need the process for these purchase-side self-invoices.
Why it matters: ITC and compliance
Reports on the notification say a self-invoice that is not reported on the portal may not be treated as a valid invoice, which could put the ITC on that reverse charge purchase at risk. The reverse charge tax itself remains payable whether or not an IRN is generated. Because exact consequences depend on the notification wording and later clarifications, treat the safe approach as generating the IRN on time for every covered self-invoice.
What to do before 1 January 2027
- Make a list of your reverse charge purchases: unregistered suppliers and overseas service providers.
- Check whether your accounting or billing software can create RCM self-invoices and report them to the Invoice Registration Portal.
- Decide who will generate the IRN and when, so that it happens before you claim ITC.
- Keep a separate record of RCM e-invoices and reconcile them with your GST returns.
- Brief your accounts team and test the process with a few sample invoices in December.
How Brightfin can help
If you are not sure whether you fall under e-invoicing or how to handle reverse charge self-invoices, we can review your purchases and set up a simple process. See our GST return filing and GST advisory services, or message us on WhatsApp.
Sources
- TaxByKK library, “Tax invoice, debit and credit note”: rule 48(4) to 48(6) of the CGST Rules, Notification No. 13/2020-Central Tax, Circular No. 186/18/2022-GST dated 27.12.2022 and Circular No. 198/04/2023-GST dated 17.07.2023
- Notification dated 26 October 2026 amending Notification No. 13/2020-Central Tax, as reported in tax news and professional updates
- The notification itself was not available in the TaxByKK library at the time of writing, so the details of the new change come from these reports. Please check the official notification on the CBIC website before relying on it.
This article is for general information only and is not legal or tax advice. Rules, thresholds and effective dates can change, so check the current notification or speak to a professional before you act.
