The invoice looking clean is exactly the problem
A domestic vendor who owes you GST puts it on the invoice, you see the number, and it's obviously a tax question. A foreign vendor never charges Indian GST, because they aren't registered in India's system and have no reason to be. The invoice looks complete. Nothing about it signals that a tax obligation exists on your side, which is exactly why this gets missed even by companies that are otherwise careful about GST on their own domestic supplies.
The rule doesn't care that the foreign invoice is silent on GST. Any service bought from someone located outside India is treated as an import of service, and the law puts the payment obligation on the recipient, your company, not the seller. Silence on the invoice is the default, not an exemption.
No threshold protects you here
The usual instinct, "we're too small for GST to matter yet," doesn't apply to reverse charge. Section 24(iii) of the CGST Act makes registration compulsory for anyone liable to pay tax under reverse charge, with no turnover threshold at all, unlike the ordinary registration limit that exempts small businesses.
A specific version of this catches founders who've heard there's an exemption for legal fees: a partnership of advocates or an individual advocate providing legal services to a business under Rs 20 lakh turnover is exempt from GST under a separate notification. That exemption is written for advocates on the rolls of the Bar Council of India. A foreign lawyer, wherever they practise, isn't one, so the exemption doesn't reach them, a point a 2025 West Bengal Authority for Advance Ruling confirmed directly on a foreign patent attorney's fees, holding them taxable as import of legal services under reverse charge regardless of the payer's size.
The self-invoice is the step that's actually missed
Since Rule 47A took effect on 1 November 2024, your company must issue itself a self-invoice under Section 31(3)(f) within 30 days of receiving the foreign service, standing in for the tax invoice a domestic vendor would have issued. This self-invoice never appears in your GSTR-2B, because there's no foreign counterparty filing a return on the other side of it, so it can't be picked up automatically the way a domestic reverse-charge purchase from a registered supplier can. It has to be tracked on its own register and claimed manually.
This is usually not a cash cost if the service is used for your business: the IGST you self-pay is generally available as input tax credit, claimed manually in your GST return rather than pulled in automatically. The actual risk isn't the tax rate, it's that nobody generates the self-invoice or pays the tax at all, which shows up later as unpaid tax plus interest, not as a credit you get to claim.
What goes wrong without a CA
The company pays a foreign consultant's invoice through the normal AP process, books it as an expense, and nothing in the workflow prompts anyone to ask a GST question, because nothing about the invoice looks GST-relevant. Months or years later, an auditor or a diligence team reviewing foreign payments finds a pattern of unreported import-of-service transactions, and the fix at that point is back tax plus interest for every missed month, not a same-day correction. The cleanest fix is a standing checklist: any payment to a service provider located outside India gets a self-invoice and an RCM entry, every time, regardless of how small the amount is.