ITC availed twice on single supply of security sercice

[KALLESHAMURTHY MURTHY K.N.]

 

Dear Sirs,

ABC LLP used security services from a registered person. The supplier collected tax under FCM. ABC LLP availed ITC on the invoice issued by the supplier. The Department officer observed the non-payment of tax under RCM as per Notification 29/2018 dated 31-03-2018. ABC LLP discharged the tax under RCM and availed ITC which served as availed ITC twice for a single supply but there was a double payment of tax. Is ABC LLP correct in availing of ITC twice on a single supply and what about double payment of tax?

AI Summary

ABC LLP faces double tax payment issue due to GST mechanism switch; advised to claim refund under Section 54(8)(e). ABC LLP, having used security services, availed Input Tax Credit (ITC) twice for a single supply due to a misunderstanding of tax payment obligations under the Goods and Services Tax (GST) framework. The supplier initially collected tax under the Forward Charge Mechanism (FCM), but the Department later identified the need for tax payment under the Reverse Charge Mechanism (RCM) as per Notification 29/2018. This resulted in a double tax payment. Experts advised that ITC cannot be claimed twice on the same invoice and recommended filing a refund claim for the excess payment under Section 54(8)(e) of the CGST Act. Discussions highlighted the complexities of switching between FCM and RCM and the importance of adhering to proper tax procedures to avoid litigation.