ITC on RCM to be paid on import of services

[Shrikanth Parmarthy]

We got summons relating to RCM for the period FY 2018-19 to FY 2023-24 on import of services from a group company outside India. If we pay the RCM liability in FY 2025-26 before issue of SCN are we eligible for claim ITC. Suppose if we receive notice under section 73 or section 74 and then make payment of RCM liability then can we claim ITC.

Can anyone kindly help on this issue.

AI Summary

Input Tax Credit on reverse charge: eligibility depends on timing of payment and recipient-issued invoice; late payment risks denial.
ITC on tax paid under reverse charge depends on the timing of payment and the date the recipient issues the invoice: if the recipient issues the invoice in a later financial year within the prescribed timeline, the ITC claim period may be reset and credit may be available; conversely, payment made outside the statutory time limit or tax paid under specified penal assessment provisions will generally be ineligible for ITC. Interest and penalty exposure may arise for delayed issuance or payment.