Restriction u/s 16(4) of CGST Act applicable on services received under RCM also

[Tanmay Bhardwaj]

Dear Experts

I received legal services in February 2018 on which i was liable to discharge GST under RCM mechanism. However i made payment to such service in October 2018. My question is whether restriction u/s 16(4) of the CGST Act, 2017 would be applicable in this and accordingly, i would not be able to avail ITC of GST paid on such service?

Regards

Tanmay

AI Summary

Query on late GST payment under RCM: Section 16(4) limits ITC claim eligibility for delayed February 2018 legal services. A query was raised about whether the restriction under Section 16(4) of the CGST Act, 2017 applies to services received under the Reverse Charge Mechanism (RCM) for which GST was paid late. The inquirer received legal services in February 2018 and paid for them in October 2018, questioning the eligibility for Input Tax Credit (ITC). The response clarified that Section 16(4) does not differentiate between tax paid normally and under RCM, suggesting the inquirer cannot claim ITC for the February invoice after October 2018. Additionally, it was noted that the tax should have been paid by March 20, 2018, and any delay would incur interest.