Input for RCM payment

[KARAN VERMA]

Sir

My question is if I have paid RCM on ocean freight belong to 2017-18 in January, 2020 GSTR-3B.

Whether I am eligible to claim input tax credit for the same.

[Rajagopalan Ranganathan]

Sir,

As per proviso tp Section 16 (4) of CGST Act, 2017 "provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.

Therefore since you have paid IGST in January 2020(with interest) you can take the credit since the proviso is not applicable to IGST paid or tax paid under RCM.

[Alkesh Jani]

Sir,

In the recent judgment Hon'ble High Court of Gujarat, held as under

"254. In view of the aforesaid discussion, we have reached to the conclusion that no tax is leviable under the Integrated Goods and Services Tax Act, 2007, on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India upto the customs station of clearance in India and the levy and collection of tax of such ocean freight under the impugned Notifications is not permissible in law.

255. In the result, this writ-application along with all other connected writ-applications is allowed. The impugned Notification No.8/2017 – Integrated Tax (Rate) dated 28th June 2017 and the Entry 10 of the Notification No.10/2017 – Integrated Tax (Rate) dated 28th June 2017 are declared as ultra vires the Integrated Goods and Services Tax Act, 2017, as they lack legislative competency. Both the Notifications are hereby declared to be unconstitutional. Civil Application, if any, stands disposed of."

SCA No.726 of 2018-Gujarat High Court judgment dated 23.01.2020 = 2020 (1) TMI 974 - GUJARAT HIGH COURT.

Of course Govt. may file an appeal before SC.

Above is just for the information.

Thanks

[Ganeshan Kalyani]

GST on ocean freight was a double taxation. Importer pays tax customs duty which has IGST component. Secondly tax was suppose to pay under RCM as per Notification no. 10/2017. Wherever the ITC was available to the taxpayer they paid and claimed the credit. For them it was not a impact as such. However, there are taxpayer importing taxable goods but their final outward supply is exempt. Those were in loss and they do not get credit . The Hon'ble Gujarat High Court decision is really a good decision and saved a lot of tax. It gave taxpayer a great relief. However, the taxpayers of other states have still to hold their breath till the High Court of their respectie States takes the same view as Gujarat High Court has taken. Gujarat High Court the Order on 23.01.2010 in case of M/s. Mohit Minerals = 2020 (1) TMI 974 - GUJARAT HIGH COURT.

AI Summary

Input tax credit eligibility affirmed for IGST/RCM payments made after the original year; ruling questions taxation of ocean freight. A query whether input tax credit is available for reverse-charge/IGST paid in January 2020 for ocean freight of 2017-18. One reply states the limited post-filing credit window does not preclude claiming credit where IGST or RCM tax has been paid subsequently, permitting credit. Another reply notes a High Court held ocean freight to the customs station of clearance is not taxable under IGST and declared the taxing notifications ultra vires, providing relief from double taxation for taxpayers in that jurisdiction.