TaxTMI 
TaxTMI 
Honorable colleagues, one of my clients paid for freight in 2017–18, but he failed to pay the GST. The department has now sent him a notice about the GST on the freight he paid for in 2017–18. My inquiry is whether he can claim the ITC in his current period return if he pays now, following the notice served under Section 73. In my view, he can claim because as per sec 16 (3) no ITC availed in respect of any tax that has been paid in pursuance of any order where any demand has been confirmed on account of fraud or will full misstatement or suppression of facts
ITC on freight
02 Nov 2023 
8 Replies 
2275 Views Asked by
Input tax credit eligibility for freight under reverse charge follows recipient invoice issuance and tax payment before claiming.
Whether ITC for freight paid earlier can be claimed when tax is later paid under reverse charge is disputed: one view applies the time bar for "any invoice" to self invoices and denies ITC if the statutory period has lapsed; another view treats recipient issued self invoices as starting the time limit at issuance, allowing ITC if tax is paid and other conditions of Sections 16 and 17 and applicable rules are met. Administrative guidance states the relevant financial year is the year the recipient issues the self invoice, subject to tax payment, conditions for ITC, and interest or penalties for delayed compliance. (AI Summary)
Whether ITC for freight paid earlier can be claimed when tax is later paid under reverse charge is disputed: one view applies the time bar for "any invoice" to self invoices and denies ITC if the statutory period has lapsed; another view treats recipient issued self invoices as starting the time limit at issuance, allowing ITC if tax is paid and other conditions of Sections 16 and 17 and applicable rules are met. Administrative guidance states the relevant financial year is the year the recipient issues the self invoice, subject to tax payment, conditions for ITC, and interest or penalties for delayed compliance. (AI Summary)