Belated GST Payment under RCM - Eligibility of ITC in the year of payment

[Pradeep Singhi]

Sir,

During the F.Y 2018-19, service was received from lawyer & was also recorded in the books of accounts. However, GST liability under RCM on the said services was not paid, neither any self invoice was issued. This issue was identified in the current year i.e F.Y 2022-23.

Now, we have queries with regards to the above mentioned issue as follows:

1. Whether ITC is eligible if payment of RCM is done in current year i.e F.Y 2022-23?

2. If yes, what is the best way to reflect this transaction in our returns to avail ITC?

3. If we pay GST (RCM) vide DRC-03 selecting F.Y 18-19 & avail ITC in GSTR-3B, whether ITC will be eligilbe or not?

4. If we pay GST (RCM) vide GSTR-3B in current year & avail ITC in same 3B return, whether ITC will be eligilbe or not?

AI Summary

Taxpayer Questions Delayed GST Liability Under RCM for Legal Services; ITC Claim Linked to Invoice Date A taxpayer identified a belated GST liability under the Reverse Charge Mechanism (RCM) for legal services received in the financial year 2018-19 but paid in 2022-23. The primary query is whether Input Tax Credit (ITC) can be claimed now and how to reflect this in returns. Experts in the forum discuss that ITC eligibility is linked to the invoice date, not the supply date, and suggest using GSTR-3B for payment and ITC claim. However, they caution that this issue could lead to litigation, as the self-invoice should have been issued in 2018-19, potentially barring ITC.