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

Input tax credit on RCM: entitlement survives supplier denial if documentary proof establishes the transaction and payment.
Entitlement to Input Tax Credit under the reverse charge mechanism cannot be defeated solely by the supplier's denial where the taxpayer can establish the transaction by supplier invoice, bank payment records, accounting entries and transport documents; the taxpayer may seek cross examination of the transporter if relied on in proceedings, and case law recognises relief where tax was wrongly paid, treating credit as a refund rather than unjust enrichment.