GST Credit on Reverse Charge Liability

[ashish shah]

Assessee has paid advertisement charges to foreign media company for showing advertisement on their channel in their (foreign) country in 2017-18. whether such charges are liable for reverse charge under import of service ??

If answer is yes and liable, if he pays the same now in 2019-20, can he avail cenvat credit for the same in 2019-2020 after payment of the same.

as an auditor, shall we have to point out the same in 9C Audit Report ?? and whehre ??

[Himansu Sekhar]

He had to pay the gst on rcm. As per sec 13(3) (a) the liability to pay gst is during 2017_18. As per sec 31(3)(f) the date of issue of the invoice is when received the service. In that context taking itc today for the period 2017_18 is not permissible.

[KASTURI SETHI]

Yes. ITC is not admissible because time of supply of services is to be determined as per section 13 (3) (a) and (b) of CGST Act. It is hit by both (a) & (b).

AI Summary

Reverse charge on imported services: ITC not allowable when liability arose earlier under time-of-supply and invoice rules.
Advertisement payments to a foreign media company are imported services subject to reverse charge; the GST liability arises at the time of supply governed by receipt of service and invoice date, so reverse charge must be paid in the earlier period when supply occurred and input tax credit cannot be claimed in a later period after that time of supply.