S&D | Sales Service Invoice on RCM basis

Reference Ticket Id:

S&D--> Sale Service Invoice

Requirement: To issue Sale service invoice on RCM basis i.e. where purchaser shall be liable to pay tax to the govt.

Problem Statement: The client is facing difficulties in issuing a sales invoice that falls under the Reverse Charge Mechanism (RCM) and once these documents are printed, the GST charges' details are also included or mentioned. Additionally, as E-Invoicing is mandatory, they are exploring the possibility of generating E-Invoices directly through the EMG. They are seeking guidance on how to accomplish this.

Use Case: Client is unable to create a Sale Service Invoice where GST will be paid on RCM basis by the purchaser(Sponsorship service). Problems Encountered:

  • In ginesys we do not have negative GST charge in S&D unlike procurement.

  • We do not have any option to mark the invoice as RCM applicable.

Workaround Solution:
We have devised a solution which could take care of all the pointers of the customer with minimum manual intervention. Steps are written below in chronological order.

  • Create a manual negative % charge for IGST or CGST/SGST as the case may be and set ledger that is set in the respective GSTIN master (This will nullify the ledger impact)

  • Create a Term and include both System's GST charge and above created manual charge with formula as On Basic value only

  • Create a Sales service Invoice with GST Doc scheme and above mentioned term. Further set Remarks as "RCM is applicable on the Bill."

  • Till this step we have achieved bill creation and ledger posting (GST ledgers are 0 and receivable is Base service amount)

  • This invoice will show in E-invoice generator

  • On pushing the invoice to EMG, portal will throw error "Taxable Value (AssAmt) value is not equal to (TotAmt-Discount)"

  • The user need to manually update the following values in EMG portal to generate IRN

  • Change RCM flag from No to Yes &

  • Remove Line level discount amount &

  • Update Line Net amount equal to Invoice value

  • Once the IRN is generated update the IRN details via excel import in Ginesys ERP

  • Since IRN is generated this doc will flow in GSTR-01 automatically, but since the record in system and record in portal are different, at the time of submitting return EMG system will show this doc in mismatch list and user need to rectify the value by hand.

  • Product Team
  • Sep 26 2023
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