GST is generally payable by the suppliers. However, in certain circumstances, as notified by the Central Government, GST may be payable by the recipients of goods/services. This is known as the Reverse Charge Mechanism (RCM). In this article, we will discuss the various aspects of a payment voucher that is to be issued for a Reverse Charge transaction.
A payment voucher is a voucher/receipt which evidences the payment made by the recipient for goods/services. This voucher is issued by the GST registered recipient who is required to pay tax on the RCM basis.
As per Section 31(3)(g) of the CGST Act, 2017, a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both.
Further, as per section 31(3)(h) of the CGST Act, 2017, a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
Section 9(3) or 9(4) of the CGST Act, 2017 talks about instances where the recipient is liable to discharge GST on reverse charge basis.
Hence, a registered taxpayer is required to issue a payment voucher to an unregistered supplier at the time of making payment for specified supplies (goods or services).
Examples for specified supplies:
- Cashew nuts (not shelled or peeled)
- Bidi wrapper leaves (tendu)
- Tobacco leaves
- Raw cotton
The particulars to be included in the payment voucher are defined in Rule 52 of the CGST Rules, 2017. As per this rule, these details need to be included in a Payment Voucher:
- Name, address and GSTIN of the supplier (if registered).
- A consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters like ‘hyphen’ or ‘dash’, and ‘slash’ (symbolised as ‘ – ‘ and ‘ / ‘ respectively), and any combination thereof, unique for a financial year.
- Date of issue of the Payment Voucher.
- Name, address and GSTIN of the recipient.
- Description of goods/services.
- Amount paid.
- Rate of tax (whether Central tax, State tax, Integrated tax, Union Territory tax or cess, as the case may be).
- Amount of tax payable in respect of taxable goods or services or both (whether Central tax, State tax, Integrated tax, Union Territory tax or cess, as the case may be).
- Place of supply along with the name of the State and its code – In case of Inter-State supply.
- The signature or digital signature of the supplier or their authorised representative.