ITC on RCM

[VishnuPriya R]

As per latest Circular 211/8/2024, they have clarified that the time limit for availing ITC for RCM paid for unregistered person is the financial year in which self invoicing is raised.

Can this be applied for the RCM paid on inward supplies received from registered person also.

For example- The supplier is registered and files the outward supplies as 'Supply attracts RCM', then it refleted in GSTR 2B. But however taxpayer paid in CGST and SGST instead of IGST for a particular supply in FY 2020-21. Now in FY 2024-25 department finds out the mistake and demands the IGST but without interest u/s. 77 but with penalty. Can this IGST paid under RCM be availed as ITC in the year of payment?

Any solutions. Thanks in advance

[Shilpi Jain]

In case of registered person, the date of issue of invoice by supplier will be the relevant date. The clarification given will not apply.

[Shilpi Jain]

Wrong tax payment by supplier should not affect your ITC claim initially (if claimed). So in case you had initially claimed C + S then dept cannot deny that credit now stating it is wrong tax payment.

[Ganeshan Kalyani]

Circular 211/8/2024 is not applicable to RCM paid on inward supply from registered supplier.

[Padmanathan KV]

You should stress more on the aspect of revenue neutrality. 

AI Summary

Can ITC on RCM be claimed in the payment year for registered suppliers? Circular 211/8/2024 clarifies for unregistered. A discussion on the Goods and Services Tax (GST) forum addressed whether Input Tax Credit (ITC) on Reverse Charge Mechanism (RCM) paid for supplies from registered persons can be availed in the payment year, as clarified in Circular 211/8/2024 for unregistered persons. The issue involved a taxpayer who mistakenly paid Central and State GST instead of Integrated GST for a supply in FY 2020-21, with the department later demanding IGST without interest but with a penalty. Responses indicated the circular does not apply to registered suppliers and emphasized the importance of revenue neutrality in ITC claims.