Input tax credit on RCM

[Shyam Kedia]

Dear Sir's,

I have some clarrifications on RCM Liablity and ITC on RCM to be taken.

a. If RCM liability is relating to FY 2017-18 i.e. client has availed advocate services in FY 2017-18 but not paid RCM liablity till now. Now if he is going to pay, whether he can take credit in the current month after paying RCM liability through cash because RCM credit can be taken only after issuing invoice/Payment voucher as applicable. So i will issue Invoice or payment voucher as applicable and take the credit.

b. In other case, it is so that i have paid tax under RCM but only thing is i have not shwon separately in 3B in table 3.1(d) under 'Inward supplies liable to RCM' and while taking credit did not shown under 'ITC for tax paid on RCM' in table 4A(3) since GST was new and people were not excatly aware of this problem. i.e. simply i have paid tax which appeared in cash ledger and then adjusted against my normal tax liability. So Whether this is accepted by the department since GST was new in 2017-18.

AI Summary

Clarification on Input Tax Credit under Reverse Charge Mechanism for 2017-18: Pay with interest; ITC eligibility limited. A participant in a discussion forum sought clarification on Input Tax Credit (ITC) under the Reverse Charge Mechanism (RCM) for transactions from the 2017-18 fiscal year. The query involved whether ITC could be claimed after paying RCM liability and if procedural errors in tax reporting would be accepted by authorities. Respondents advised that RCM for 2017-18 should be paid with interest and noted that ITC might not be eligible due to time limitations. They suggested that procedural lapses might be tolerated by the department, given the GST system's initial implementation challenges and no revenue loss.