E-Invoicing for Reverse Charge Purchases: What Changes in January 2027

Most finance teams we work with in Ahmedabad know e-invoicing from the sales side: each B2B invoice goes to the portal and an IRN comes back. In about eight weeks, for two kinds of purchases, the buyer has to generate the e-invoice.

What did the GST Council decide on e-invoicing for reverse charge?

At its 57th meeting on 8 October 2026, the GST Council recommended "extending e-invoicing to domestic supplies received from an unregistered person where the tax is payable under reverse charge mechanism, as well as to the import of services, for taxpayers having aggregate annual turnover of Rs. 5 crore and above", according to the Ministry of Finance press release on PIB.

That recommendation has since been notified. Notification No. 04/2026-Central Tax, dated 26 October 2026, adds supplies "received from an unregistered person where the tax is payable on reverse charge basis by the recipient" and "import of services" to the transactions that need e-invoicing, and it "shall come into force on the first day of January, 2027". CBIC's tax information site wasn't loading when we checked, so we read the notification from the copy published by TaxO (last checked 6 November 2026).

Does it apply to your business?

The new notification doesn't change who is covered; it adds transactions for businesses already inside e-invoicing. That limit has been ₹5 crore since 1 August 2023, when Notification No. 10/2023-Central Tax replaced "ten crore rupees" with "five crore rupees".

One wrinkle: PIB says "Rs. 5 crore and above", while Tally's guide (written by an accounting software vendor) says the current rule "applies when turnover exceeds ₹5 crore". Right at the line? Ask your CA. Tally also notes turnover is counted at PAN level, across every GSTIN under it, and that crossing the limit in any year since 2017-18 brings you in. Banks, insurers and SEZ units, which Tally lists as exempt from e-invoicing today, should ask their CA whether that exemption covers these self-invoices.

Which purchases need a reverse charge e-invoice?

• Purchases from unregistered suppliers where you, the buyer, pay the GST under reverse charge. Tally's guide lists commercial property rented from an unregistered person, services from an individual advocate, and a Goods Transport Agency that hasn't opted to pay tax itself as common cases.
• Import of services, such as cloud and software subscriptions billed from abroad, overseas consultancy and advertising bought directly from foreign platforms, per the same guide.

Not every unregistered purchase is covered, only those where the tax "is payable on reverse charge basis by the recipient". GSTN's advisory talks about "specified domestic supplies", so check your list with your CA.

How does a recipient-generated self-invoice work?

Tally's guide explains that section 31(3)(f) of the CGST Act requires a registered buyer paying reverse charge on a supply from an unregistered supplier to issue a self-invoice, and that Rule 47A sets the deadline at 30 days from receiving the supply.

What's new is sending it to an IRP. GSTN's advisory of 16 October 2026, which we read from the copy hosted by CAalley as the GST portal didn't load for us, adds two supply types: RCMDOM for domestic supplies from unregistered persons and RCMIMP for import of services. You pick the code, report the self-invoice through an authorised IRP, and get an IRN once it passes validation. The change is in the sandbox of all six authorised IRPs, but the advisory says the production rollout date "would be communicated in due time". So the legal date is fixed but the live portal date isn't; watch for GSTN's update.

What should you get ready before January 2027?

1. List every reverse charge purchase and foreign service invoice from the last year, including card-paid subscriptions.
2. Ask your software vendor or ERP team whether they support RCMDOM and RCMIMP, and when.
3. Make sure you record the supplier's name, address and state or country on every self-invoice, as Tally's checklist suggests.
4. Keep self-invoices on their own numbering series.
5. Name one person to raise self-invoices inside the 30 days, and have your vendor or ERP team run a few through the sandbox before January.

How much will reverse charge e-invoicing cost to set up?

Nothing we read sets a fee for generating these IRNs. The cost sits in your software. On packaged accounting software it may come as a vendor update, so check what your plan covers. On a custom ERP, someone has to change the e-invoice integration: a new supply type, a purchase-side screen for the self-invoice, and sandbox testing. What it costs depends on your GSTINs, your setup and your data, so we quote after scoping rather than guess.

How do you check your reverse charge e-invoices are working?

• Every self-invoice for a covered purchase has an IRN against it.
• The reverse charge tax you pay matches the total of your self-invoices.
• No covered purchase goes 30 days without a self-invoice, and no self-invoice is left without an IRN.
• IRP rejections are falling.

What mistakes do businesses make with RCM self-invoices?

Leaving testing until January is the big one. The others: forgetting foreign subscriptions on a company card, treating every unregistered purchase as reverse charge, and mixing self-invoice numbers into the sales series.

How Codelix handles this

Codelix Custom ERP covers accounts and GST with GSTR-1 and GSTR-3B reports, and after go-live we stay on for support, GST updates and monitoring through an annual support plan (AMC). If you run your own software, our API development and integration team can add the RCMDOM and RCMIMP flow to it.

On a custom ERP project for a high-volume enterprise where GST filing had been done by hand, we built a compliance module that generates GST-ready invoices with a full audit trail. We start with a free consultation and a detailed quotation, with milestone payments and an NDA if you need one.