Self-Invoicing on GeM

Self-invoicing on GeM is the process by which a government buyer on the Government e-Marketplace (GeM) generates a purchase invoice on behalf of a seller who is either unregistered under GST or enrolled under the composition scheme, enabling compliant transactions without requiring the seller to issue a tax invoice.

What is Self-Invoicing on GeM?

The Government e-Marketplace (GeM) accommodates sellers who are not required to be GST-registered, typically micro and small businesses below the GST registration threshold (INR 20 lakh for services, INR 40 lakh for goods). When such an unregistered seller supplies goods or services through GeM, the buyer is responsible under the reverse charge mechanism to generate a self-invoice and pay the applicable GST.

Self-invoicing on GeM works as follows:

• Reverse charge trigger: Under Section 9(4) of the CGST Act (as applicable), when a registered buyer purchases from an unregistered seller, the buyer pays GST under reverse charge.
• Invoice generation: GeM's payment system assists the government buyer in generating a compliant self-invoice reflecting the supply details, GST component, and reverse charge basis.
• Buyer's obligation: The government buyer deposits the reverse charge GST with the tax department and claims input tax credit, where eligible.
• Seller's simplification: The unregistered seller receives the full consideration (net of TDS if applicable) without needing to issue a GST invoice or file GST returns for this transaction.

For registered sellers above the e-invoicing threshold (INR 5 crore), self-invoicing does not apply, these sellers must generate IRN-stamped e-invoices in the normal course. For composition scheme sellers, a bill of supply (not a tax invoice) is issued, and the buyer pays GST under reverse charge.

Why Self-Invoicing on GeM matters for Indian government suppliers

Self-invoicing on GeM allows micro enterprises and craftsmen with turnover below the GST threshold to participate in government procurement without the compliance burden of GST registration. This directly supports the government's goal of bringing MSMEs into the formal supply chain. For registered sellers, understanding that self-invoicing applies only to unregistered peers, and that their own e-invoicing obligations are separate, prevents compliance errors. For government buyers, the self-invoicing mechanism ensures every GeM purchase has a valid GST audit trail regardless of the seller's registration status.

Example

A weaver cooperative registered on GeM with annual turnover of INR 15 lakh sells handloom fabric worth INR 80,000 to a central government ministry through GeM. The cooperative is below the GST registration threshold and does not have a GSTIN. GeM's system flags the transaction for self-invoicing. The ministry's accounts department generates a self-invoice under reverse charge for INR 80,000 plus applicable GST (5 percent = INR 4,000), deposits the GST, and releases INR 80,000 to the cooperative after TDS deduction.

Frequently Asked Questions

Does self-invoicing apply to all sellers on GeM?

No. Self-invoicing applies only to unregistered sellers (those without a GSTIN) and composition scheme sellers who cannot charge GST on their invoices. Registered sellers issue their own GST invoices and, if eligible, must also generate e-invoices.

Can a GeM seller voluntarily register for GST to avoid self-invoicing complications?

Yes. A seller who voluntarily registers for GST becomes a regular taxpayer, issues their own tax invoices, and removes the reverse charge obligation from the buyer. This may be beneficial for sellers approaching the threshold or those who want to pass GST ITC to government buyers.

Is TDS still deducted when self-invoicing applies?

Yes. TDS under the Income Tax Act (Section 194C or applicable section) is applied on the total payment amount (excluding GST) irrespective of whether self-invoicing is used or whether the seller is registered under GST.

How does GeM handle GST TDS alongside self-invoicing?

GeM's platform separately manages GST TDS (under Section 51 of CGST Act, 2 percent on payments above INR 2.5 lakh to registered sellers) and income tax TDS. For unregistered sellers, GST TDS under Section 51 does not apply since the buyer is paying GST under reverse charge, not the seller.