TaxTMI 
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TaxTMI 
CASH PAID ON WRONG RCM
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....ASH PAID ON WRONG RCM<br> Query (Issue) Started By: - KERAGODEGOPALARAO ANANTHARAO Dated:- 1-9-2021 Last Reply Date:- 15-9-2021 Goods and Services Tax - GST<br>Got 11 Replies<br>GST<br>We have RCM on expenses which are not covered under GST. We availed credit of RCM paid as it's paid in cash. In audit it's an objection as wrongly claimed as such to the extent of RCM claimed to be paid agai....
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....n. Is it correct? Reply By KASTURI SETHI: The Reply: The department's audit objection is undoubtedly /indisputably correct. Correct procedure has to be followed. No other escape route. Reply By Shilpi Jain: The Reply: If you actually see the situation is revenue neutral. Something which is paid wrongly is being adjusted - though not by way of adjustment of liability as provided in circular....
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.... 25 but by way of taking of credit. So at the most it can be argued to be a disclosure error. This should not lead to demand of RCM credit availed. Reply By KASTURI SETHI: The Reply: The issue is not litigation-free. However, case laws are in favour of assessee on the issue of revenue neutrality. Reply By KERAGODEGOPALARAO ANANTHARAO: The Reply: Can we prefer appeal sir. Reply By KASTURI SET....
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....HI: The Reply: Have you received show cause notice ? If so, whether the same has been adjudicated ? If you prefer to appeal against the Adjudication Order (supposing not decided in your favour), chances of decision in your favour are bright. Reply By KERAGODEGOPALARAO ANANTHARAO: The Reply: Thank you sir Reply By Amit Agrawal: The Reply: In my view, ITC against taxes wrongly paid under RCM i....
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....s available to you. In this regard, your attention is invited to the case of BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. Versus COMMR. OF C. EX., PUNE-III as reported in 2014 (8) TMI 787 - CESTAT MUMBAI wherein in Para 7.5, it is held that as under: "From the above discussion, it is very much clear that the insurance auxiliary services provided by the agents in the State of Jammu & Kashmir ar....
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....e not taxable. Therefore, the appellants are not liable to pay Service Tax for the said services of the insurance agents. In these terms, whatever credit is taken by the appellant is nothing but the refund of tax erroneously paid by them. Similar issue came before the Hon'ble Supreme Court in the case of CIT v. Mahalakshmi Textile Mills Ltd. - 1967 (5) TMI 4 - SUPREME COURT wherein the Hon'ble Sup....
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....reme Court held that - "5. By the first question the jurisdiction of the Tribunal to allow a plea inconsistent with the plea raised before the departmental authorities is canvassed. Under sub-s. (4) of s. 33 of the Indian IT Act, 1922, the Tribunal is competent to pass such orders on the appeal "as it thinks fit". There is nothing in the IT Act which restricts the Tribunal to the determinat....
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....ion of questions raised before the departmental authorities. All questions whether of law or of fact which relate to the assessment of the assessee may be raised before the Tribunal : If for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and th....
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....e Tribunal, and indeed they would be under a duty to grant that relief." Furthermore, in Para 7.6 of above-said order, it was also held as follows: "We further find that in the case of Nitco Tiles Ltd. v. CCE, Mumbai - 2007 (8) TMI 542 - CESTAT, MUMBAI, this Tribunal observed as under :- "Further, the bar of unjust enrichment will also not apply in the present case. The appellants have ta....
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....ken credit of the tax paid by them; therefore the same cannot be said to be passed on to the customers." In these circumstances we hold that the Cenvat Credit taken by the appellant is nothing but refund of the Service Tax paid by them on the services on which they were not required to pay Service Tax." You can reach me at [email protected] Reply By KASTURI SETHI: The Reply: Although....
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.... above judgement pertains to Service Tax period, yet the rationale equally applies for GST period. Very useful case law posted by Sh.Amit Agrawal Ji. Reply By Shilpi Jain: The Reply: Thank u Mr.Amit for readily making available the case laws. Reply By Amit Agrawal: The Reply: Thank you very much for your kind words, Sh Kasturi Sethi Ji and Ms. Shilpi Jain. Reply By KASTURI SETHI: The Reply: ....
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.... Sh. Amit Agrawal Ji, Pl. contribute regularly on TMI. I wish to relish your knowledge in this forum.<br> Discussion Forum - Knowledge Sharing ....