Delayed payment of RCM

[Murari Agrawal]

Dear Experts we find that a few payments were made to transporters during the month of Oct'23, Feb'24 & Mar'24, but the RCM was neither paid nor shown in 3B return. Can we pay now and take ITC. How to show in return. Thanks

[Alkesh Jani]

Shri

Please refer to Circular No. 211/5/2024-GST dated 26.06.2024. Hope this may be of your help.

Thanks

[Fahiyaz Ahmmed]

Yes, you can as per recent clarification, but the problem was due to the contravention of the (time of supply Sec 12) (in-service -RCM - invoice within 61 days .....) Penalty will be paid (Us 122)

[Murari Agrawal]

 I want to add that payments were made to transporters who were registered under GST and issued bills/receipts but did not upload the transactions in their GSTR-1 and are not reflected in our 2A.

[Fahiyaz Ahmmed]

1st Scenario-

If G.T.A (Goods Transport Agency) Collect the GST Amount from you, then there is no case of R.C.M Which Means GTA Opt for forward charge @12%

Tell them the update In GSTR-1 and it reflected GSTR-2B, and you are eligible to take ITC (Oct 23 invoice- before 30th Nov 2024 Or annual return) Feb and march 2024 invoice take ITC before 30th Nov 2025 or annual return )

2nd Scenario-

If GTA Is Not Registered And GTA Opts For R.C.M then you must pay tax under R.C.M @5% (Self-Voice) and then take I.TC. but in these situations you may get penalise Us 122 due to the contravention of Sec 12

[Murari Agrawal]

Dear Mr Fahiyaz, Transporter is registered, GST No. is printed on their bill, but they are not charging GST

[Fahiyaz Ahmmed]

YOU SHOULD PAY GST UNDER RCM @5% BUT SEC 12 TIME OF SUPPLY BREACH, SO YOU GET PENALISE US 122 

Time of supply in case of services

In case of reverse charge, the time of supply shall be the earliest of the following dates:

• The date of payment
• The date immediately after 60 days from the date of issue of invoice by the unregistered supplier
• The date of issue of the invoice by the recipient*

[Shilpi Jain]

Pls pay the GST now under RCM @5% with interest @ 18% p.a. and take credit since you have time up to 30th Nov to claim credit.

[Fahiyaz Ahmmed]

Totally agree with Shilpi Ma'm since GTA is registered and already issue invoice than there no contravention of Sec 12, that mean no penalty, 

[Murari Agrawal]

Thanks dear experts for your valuable opinions.

[sapna chauhan]

yes, if the RCM liability is recognized with the specified that which is 30 Nov and annual return which ever is earlier, so we can pay and claim the RCM liability and RCM input if this condition full fill, But if we had not recognized until the specified date then we have to the liability with 18% interest p.a. and the input RCM will be void under section 16(4).

AI Summary

Reverse charge obligation requires late GST payment to preserve input tax credit, subject to interest and possible penalty.
If a registered transporter fails to charge GST, the recipient must pay tax under reverse charge to preserve input tax credit, provided the tax and credit are recognised within the prescribed claim period in administrative guidance. Late discharge of reverse-charge liability entails interest and possible penal consequences linked to breach of time of supply rules; time of supply for reverse charge is the earliest of payment, the expiry of the 60-day invoice period, or issue of the recipient's invoice.