RCM - not paid

[VIGNESH]

Sir. kindly clarrify , We have received a notice for non payment of RCM for financial year 2017-2018 unforunately we have missed the same, can we pay tax +interest and claim tax now!

[Padmanathan KV]

Is the supplier registered or unregistered? In case of unregistered supplier, there is a view that ITC can be availed even now. But this is subject to litigation by Department.

[Amit Agrawal]

Kindly refer to discussion under Issue ID: 117652 bearing subject line - Reverse Charge Mechanism (which was raised by you only in Nov, 2021).

There, I have given my views and elaborate reasoning explaining why & how ITC can be claimed.

Only added layer of complexities - since that discussion - is the amendment in Section 39 (9) made effective from 01.01.2022.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Please read in above post as "............... made effective from 01.10.2022".

[GUNASEKARAN K]

Interest @ 18% applicable for delayed payment of Tax.

Input tax credit pertaining to FY 2017-18 can be claimed till the due date of furnishing of the return for the month of March, 2019. After such due date, taxpayer is not eligible to claim ITC for financial year 2017-18.

[KASTURI SETHI]

Sh.Vignesh Ji,

ITC cannot be claimed now.

Every querist posts query with hope of remedy and relief.

Such case is worth fighting but cannot be taken for granted.

A faint hope of winning the case at the stage not less than High Court.

[GUNASEKARAN K]

I agree Mr.Kasturi Sethi Sir,

Input tax credit pertaining to FY 2017-18 can be claimed till the due date of furnishing of the return for the month of March, 2019. After such due date, taxpayer is not eligible to claim ITC for financial year 2017-18.

[Ganeshan Kalyani]

A detailed reply and discussion of views between Sri Amit Sir and Sri Kasturi Sir in the issue id of 2021 has left no stone unturned to give a foolproof reply. I read it now and memory refreshed. I agree with the views of both the experts in respect of their way of interpreting the law.

Just a few word about writing and expert.

Writing is an art of putting thoughts on paper by words. Writing really requires a great effort in choosing correct word to express thought and then giving a meaning to the sentence and also keeping the flow of the reading is really a war like situation. Mind throws a word and we pick up them and then think is this apt word and then we choose another word and also confirm it's meaning from dictionary and then write it. Two time reading and third time we find a different word altogether and we add it. Writer play with his pen and mind and heart to give birth to a meaningful sentence and paragraph so as to convey the exact same thought of his/her (writer) in the mind of the readers.

One word missed or added can give totally different view and meaning and make all the efforts to go waste.

A writer is sitting inside every expert who simply the complex law with their huge efforts and help the querist in solving their issues on tax.

A coffee or a tea should be offered to them (expert) to relax their mind. A salute or handshake or sway of hand or a smile or a head shook would be enough to honour them. They (expert) are like God to all those devotees (querist) who come with problems and go with the solution.

I sincerely bow down to all the experts especially Sri Kasturi Sir and express my respect to them.

If not an award which is a piece of paper you reside in each querist, readers mind and heart.

Thanks a lot !

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Thanks for your charming compliments. I do not deserve such high compliments.

Thanks & regards

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

I value your outpourings, vision, mindful reading and mindful understanding and hard work.

"There is no substitute for hard work------Thomas A. Edison American Inventor (known for 1000 inventions)

[Shilpi Jain]

If the amount is significant, taking credit for procurements from unregistered persons is worth trying. Though relief could be expected only in the Courts. So if it is procurements from unregistered person for notified RCM section 9(3), consider paying and taking ITC and not utilising until favourable order.

In case of RCM u.s 9(4), i.e. procurement from unregistered persons, consider taking a stand of no liability.

Though important that one considers the cost of litigation involved.

The Government manages to earn a good part of tax revenue merely on the ground that the taxpayers do not want to waste money and time in litigation. It is very unfortunate!!

AI Summary

Business Entity Faces RCM Tax Non-Payment Notice; Experts Debate ITC Claim Feasibility Post-Section 39 (9) Amendments A business entity received a notice for non-payment of Reverse Charge Mechanism (RCM) tax for the financial year 2017-2018 and inquired about the possibility of paying the tax with interest and claiming input tax credit (ITC). Responses varied: some experts noted that ITC could be claimed until March 2019, but not afterward, while others suggested that claiming ITC now might require litigation. The discussion highlighted the complexities introduced by amendments to Section 39 (9) and the potential costs of litigation. Opinions diverged on the feasibility and advisability of pursuing ITC claims in court.