Belated payment of RCM

[Muthukumar Muthunarasimhan]

Dear Experts,

Shall take ITC for belated payment of RCM on ocean freight pertains 2018-19?Now paid in 10th. October 2020? Is it hit by time limit u/s 16 (4) of GST Act? Please comment.

[Rajendra Prasad]

Dear Mr Muthukumar

I have a doubt on payment of RCM on ocean freight. How it is applicable.

There are differential views on taking ITC on RCM.

Pro View : Raise the self invoice now and take the credit. Legally experts are telling that self invoices can be raised now with current date and you can take ITC on RCM in this year. Only violation is late raising of self invoice for which the penal consequence are very less. Please consider risk involved in it while taking ITC. If the amount is small you can leave. It is a large amount , you can follow this method.

Against View : ITC can not be claimed . ITC can be claimed till 22.10.2019 .

[Rajagopalan Ranganathan]

Sir,

If you have paid the tax under RCM after due date then you have to pay interest. If you pay it in October 2020 along with applicable interest then you can raise a self invoice on the date of payment and avail the ITC. Only the service provider has to issue invoice within 30 days from date of provision of service. In my view no time limit is prescribed for issuing self invoice. But it is safe to issue the self invoice within 30 days from the date of payment.

[Ganeshan Kalyani]

I agree with the views of Sri Rajendra Prasad Sir. There are two different views as opined by Sir.

[Bhavika Chothani]

If you are sending goods for Job Work then challan is generated. IRN is not required for Challan

AI Summary

Input tax credit for belated RCM payment may be claimed if tax paid with interest and self invoice raised on payment. Practical compliance advice: pay the outstanding RCM tax with applicable interest, then raise a self invoice dated on the payment to claim input tax credit; this accepts the risk of late self invoicing and potential minor penalties. An alternative position is that the statutory time limit for claiming ITC has expired, so no claim is permissible. Service providers are separately obliged to issue invoices within thirty days of supply.