ITC on tax paid in reverse charge

[Narendra Soni]

Dear expert

Kindly confirm whether ITC is available on GST paid by recipient in reverse charge.

[Govind Gupta]

Tax paid on reverse charge basis will be available for input tax credit if such goods and/or services are used, or will be used, for business. The service recepient (i.e., who pays reverse tax) can avail input tax credit.

AI Summary

Input tax credit on reverse charge is available when goods or services are used for business purposes. Tax paid by a recipient under the reverse charge mechanism qualifies as eligible tax for input tax credit where the goods or services are used, or will be used, in the course or furtherance of business; the recipient who pays reverse charge may avail the input tax credit subject to the ordinary GST conditions and restrictions.