ITC on RCM - allowability

[umeshkumar jhawar]

Our client has availed services from Transporter for transportation and paid RCM on same. The client has availed the ITC which was paid in RCM.

Later on the transporter has denied for services during GST search proceeding, which was claimed by our client. And due to denial by the transporter the department is denying the ITC and asked to reverse the ITC which was claimed through RCM paid.

Whether department can do the same ?

Any remedy or argument against stand of GST department ?

Thanks in Advance.

AI Summary

ITC Reversal Demanded After Transporter Denies Services; Experts Urge Evidence Use and Cross-Examination Under Natural Justice Principles. A client paid Reverse Charge Mechanism (RCM) on transportation services and claimed Input Tax Credit (ITC). However, the transporter denied providing services during a GST investigation, leading the department to demand ITC reversal. Experts in the forum argue that ITC cannot be denied based solely on the transporter's statement if the transaction is genuine. They suggest using evidence like invoices, bank statements, and service receipts to contest the denial. Some recommend requesting a cross-examination of the transporter, citing principles of natural justice. Others argue that even if services weren't received, the situation is revenue-neutral, negating the need for ITC reversal.