rcm for fy 2020-21

[giri gattupalli]

respected sir,

notice under sec-74 is issued for a taxable person for FY 2019-20 based on audited P&I submitted along with FORM 9C, for payment of RCM in respect of expenditure incurred for transport charges, found in profit & loss account .it seems that , as the limitation period lapsed for issuing notice under sec-73, authorities opted for alternative route of issuing notice under sec-74.

whether notice under sec 74 is valid for non-payment of RCM? .please discuss sir

AI Summary

Section 74 invocation for reverse charge non-payment requires proof of fraud or suppression, not mere non-payment.
Invocation of Section 74 for non-payment under the reverse charge mechanism requires proof of tax evasion by fraud, wilful misstatement or suppression and a gain to the taxpayer; where the transactions are recorded in audited accounts and filed returns, such facts undermine Section 74 and ordinarily point to recovery under Section 73. Applicability of Section 74 for RCM non-payment remains fact-sensitive and depends on the department meeting its burden to establish intent to evade.