Input Tax Credit Under Reverse Charge

[Shreyansh Agrawal]

Dear Experts,

My Client has paid GST under Reverse Charge in the month of July. whether i will get credit in the month of July itself or in Subsequent Period i.e in August????

[RAMESH PRAJAPATI]

Credit is available in the same month. In fact, while filing return, your client will be directed to claim ITC by the system itself. Nothing to worry.

[KASTURI SETHI]

In other words, virtually no such sword for causing loss of ITC exists.

[DR.MARIAPPAN GOVINDARAJAN]

It is the common opinion that the input tax credit on reverse mechanism is available on the same month itself.

[Himansu Sekhar]

July itself

[Ganeshan Kalyani]

The Institute of Chartered Accountants of India, New Delhi has written suggestion seeking clarification on the subject that whether input tax credit of the tax paid under reverse charge is available in the same month or not.

Yes, all are suggesting that credit can be taken in the same month. Also the Commercial Tax Officer has opined that credit can be taken in the same month.

But my contention is why there is no clarificatory notification on this.

[KASTURI SETHI]

It is a matter of common knowledge that ITC on GST paid and utilised in course or furtherance of business cannot be denied. Two basic conditions are fulfilled . That is O.K. Act is very much clear.

AI Summary

Input tax credit under reverse charge can be claimed in same month through return filing. Input tax credit paid under the reverse charge mechanism may be claimed in the same tax period when the tax is paid; the return-filing system permits taxpayers to claim that credit, and where the tax relates to inputs used in the course or furtherance of business, denial of credit is not appropriate.