RCM GST ITC Paid

[Madhavan iyengar]

In Respect to tax payable under Reverse Charge Mechanism if the services pertain to FY 17-18 and Invoice is also of FY 2017-18

However the Company has made the payment of RCM in July 20

Is Company eligible to take credit of the aforesaid RCM ITC paid in July 20

IS this ITC hit by the provisions of sec 16(4)

AI Summary

Input tax credit availability under reverse charge subject to statutory payment, invoicing and reporting conditions.
ITC under the Reverse Charge Mechanism is generally available only after the recipient pays the tax, issues any required self-invoice, and reports the payment in the return for the month of discharge; however, a contrary view holds that where the supplier's invoice dates from an earlier year, Section 16(4) and documentary/timing requirements may preclude claiming ITC, exposing taxpayers to audit and potential litigation if credit is taken without satisfying payment, invoicing and reporting conditions.