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.

Thanks

AI Summary

Reverse charge ITC time limit bars claiming input tax credit for past fiscal year after statutory cutoff, making the tax a business cost.
Reverse charge tax must be paid in cash before ITC can be claimed, and the statutory cutoff for claiming ITC for the fiscal year has lapsed; therefore ITC cannot be availed in a later return, making the tax a business cost, although payment should be made to address non-compliance. A corrected rule reference was noted and a limited pathway via self-invoice for procurements from unregistered persons was identified, subject to procedural compliance and audit risk.