INPUT USE IN REVERSE CHARGE

[Davinder Singh]

Dear Sir,

Kindly confirm if we have surplus GST Input at the end of the month, Can be use in payable against reverse charge,

[RAMESH PRAJAPATI]

RCM Liability cannot be discharged through ITC. Please refer to following rule.

Rule 85 (4) of CGST Rules 2017 provides that the amount deducted under section 51, or the amount collected under section 52, or the amount payable on reverse charge basis, or the amount payable under section 10, any amount payable towards interest, penalty, fee or any other amount under the Act shall be paid by debiting the electronic cash ledger maintained as per rule 87 and the electronic liability register shall be credited accordingly.

[subramanian vijayakumar]

RCM cannot adjust from ITC as per the provision of the act one has to pay and avail it as ITC credit

[RAMESH PRAJAPATI]

Yes, it is very clear - RCM means, in other words - cash payment

[KASTURI SETHI]

I support the views of both experts.

[Himansu Sekhar]

The provisions of law are very clear. Sec. 49 of cgst act has provided that reverse charge will have to be paid through cash.

[Ganeshan Kalyani]

RCM liability should be paid in cash.

AI Summary

Reverse Charge Liability must be discharged from the electronic cash ledger, not by using Input Tax Credit.
Reverse charge liability under GST cannot be discharged by utilising Input Tax Credit; such amounts must be paid by debiting the electronic cash ledger and cannot be adjusted from the electronic credit ledger, reflecting the statutory payment regime and implementing rules.