Section 16(4) vs RCM

[NARENDER YARRAGORLA]

For the FY 2020-21, we have failed to pay RCM on Freight, Can we pay and claim ITC in FY 2021-22 sir

[PAWAN KUMAR]

Dear sir,

As per my view, since services of Transportation received during 2020-21, Payment of which already made during FY 2020-21 but GST only left to pay to Govt.

Hence acutal time for payment was already lapsed. now you need to pay along with interest and you may claim ITC of GST amount paid, restriction under section 16(4) will not apply. Only there will be interest expense.

[Amit Agrawal]

Please see discussion under Issue Id: - 117652

[PAWAN KUMAR]

dear sir,

i read your reply, it is absolutely fine, ITC is admissible on payment, in case of RCM.

[KASTURI SETHI]

Chances are bleak without litigation.

[Shilpi Jain]

If the other party is the tax department, many things chances are bleak. But the taxpayer can considering his risk appetite take the other way to challenge department of required.

AI Summary

Can Reverse Charge Mechanism on Freight for 2020-21 be Paid with Interest in 2021-22? ITC Claim Possible. A query was raised regarding the payment of Reverse Charge Mechanism (RCM) on freight for the fiscal year 2020-21, questioning if it could be paid and Input Tax Credit (ITC) claimed in FY 2021-22. One respondent advised that although the payment period has lapsed, the payment can still be made with interest, and ITC can be claimed without restriction under Section 16(4). Another respondent suggested referencing a previous discussion for more details. Other replies indicated that pursuing this without litigation might be challenging, and the taxpayer should consider their risk if challenging the tax department.