Tax liability/ ITC of RCM transaction for FY 2021-22

[AKSHAT AGARWAL]

In one of case, client have not paid RCM on certain expenses for FY 2021-22. Case is under audit for FY 2021-22. Above transaction involves tax of Rs. 4.5 Lac. Now the ITC of such RCM can be taken by paying the same through April-25 GSTR-3B keeping in view the amended provision of Sec-47A of CGST Rule, 2017.

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AI Summary

Taxpayer Faces Challenge in Claiming Input Tax Credit Beyond Statutory Time Limit for Reverse Charge Mechanism Expenses A client did not pay Reverse Charge Mechanism (RCM) GST on certain expenses for fiscal year 2021-22, involving a tax amount of Rs. 4.5 lakh. The case is under audit, and the client seeks to discharge the RCM liability and claim Input Tax Credit (ITC). However, the time limit for claiming ITC for that fiscal year expired on 30 November 2022, making ITC claim in April 2025 impermissible. The client should pay the RCM liability to rectify non-compliance, but the tax amount will become a business cost.