Can avail input same month on RCM paid

[raja raja]

Dear experts,

Please guide me Aug month we have paid reverse charge , same month we can claim input.

Thanks in advance

[SHIVKUMAR SHARMA]

Yes,You can avail the ITC of RCM in the same month after making the Cash payment of Tax Under RCM.

[KASTURI SETHI]

Sh.Sharma Ji,

Agree with you. There is no doubt. There was a lengthy discussion regarding whether ITC can be taken after crossing one month from the date of payment in cash or from the date of invoice under RCM. Do you remember ? If so, clear my doubt citing Rule etc.

[Ganeshan Kalyani]

This topic has been discussed previously. The credit on RCM payment can be availed in the same month.

[SHIVKUMAR SHARMA]

Respected Shri Kasturi Ji.

Rule 36 of CGST Rules Perscribes Documentary requirements & conditions for claiming Input tax credit. Rule 36(1) Perscribes the documents which shall form the basis for claiming input tax credit.As per section 31(3)(f),the registered recipient paying tax under RCM ,has to issue Invoice in respect of goods/services received by him from an unregistered Supplier.According to sub clause(b) to rule 36(1) Invoice issued in accordance with provisions of Section 31(3)(f) of the CGST Act, subject to payment of Tax is eligible document for Claiming credit of input tax.

It is clear that by virtue of Rule 36(1) Invoice raised by the recipient is the eligible document for claiming credit of tax paid under RCM But rule also imposes condition for payment of tax.

Nonetheless it is Inportant to note that in case of tax charged by the Supplier,the Tax invoice issued by the supplier is the eligible document for claiming credit.The claim of credit by the recipient ,in GSTR-2 is on provisional basis and gets finalised after matching of returns which is again subject to payment of tax by the supplier.

In line with the above an argument can be taken that in case of tax under RCM,Invoice issued under section 31(3) (f) is the eligible document for claiming credit.The credit of tax payable under RCM can be claimed by the recipient ,in GSTR-2 on provisional basis and the same gets finalised only after the payment of tax by the recipient.

[KASTURI SETHI]

Thank you Sharma Ji for comprehensive reply. I am also thankful to Sh.Kalyani Ji.

[koushal sharma]

Yes, you can claim input within the same month of RCM payment

Know related faq here: GST Forum India

AI Summary

Input tax credit on reverse charge: claimable in the same month after paying tax under RCM, subject to return finalisation. Input tax credit under the reverse charge mechanism can be availed in the same month after the recipient makes the cash payment of tax; the invoice issued by the recipient is the eligible document under Rule 36(1), and claims in returns remain provisional pending return matching and finalisation contingent on the payment condition.