TaxTMI 
TaxTMI 
Tax liability/ ITC of RCM transaction for FY 2021-22
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax liability/ ITC of RCM transaction for FY 2021-22<br> Query (Issue) Started By: - AKSHAT AGARWAL Dated:- 2-5-2025 Last Reply Date:- 3-5-2025 Goods and Services Tax - GST<br>Got 4 Replies<br>GST<br>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 p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aying the same through April-25 GSTR-3B keeping in view the amended provision of Sec-47A of CGST Rule, 2017. Thanks Reply By YAGAY andSUN: The Reply: Here's a detailed breakdown and our Inputs on your query: - Background: * The client did not pay Reverse Charge Mechanism (RCM) GST on certain expenses during FY 2021-22. * The case is under audit for FY 2021-22. * The tax amount involv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed is Rs.4.5 lakh. * The client is now willing to discharge RCM liability and claim ITC in the GSTR-3B of April 2025. * You mentioned Rule 47A of CGST Rule, 2017 - likely referring to the amended time limit for availing ITC. Legal Basis - ITC on RCM under GST: Under GST law: * RCM tax must be paid in cash (not through ITC). * Once paid, ITC can be claimed, subject to the time limits laid....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... down in Section 16(4) of the CGST Act, 2017. Key Amendment - Section 16(4): * Before amendment: ITC on any invoice or debit note had to be claimed by the due date of GSTR-3B for September following the end of the financial year, or before filing the annual return, whichever was earlier. * After amendment via Finance Act 2022 (effective 01-Oct-2022): The time limit was extended to 30th Novemb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er of the next financial year. * Finance Act 2023 added Section 47A - but this relates to automatic compounding of late fees, not ITC. You likely meant Section 16(4) instead. Current Position (as per latest provisions): For FY 2021-22, the last date to avail ITC would have been: * 30th November 2022 (as per amended Section 16(4)). So, availing ITC in April 2025 is not permissible for FY 202....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1-22 RCM liability because the time limit has already lapsed. Conclusion: * Your client can and should pay the RCM liability now (Rs.4.5 lakh) to rectify non-compliance and avoid further interest/penalty. * However, ITC cannot be claimed in April 2025, as the time limit to claim ITC for FY 2021-22 expired on 30-Nov-2022. * This tax amount will therefore become a cost to the business. Reply....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... By AKSHAT AGARWAL: The Reply: Sir, I have wrongly mentioned Sec-47A, I am discussing in light of provision of Rule-47A Reply By Sadanand Bulbule: The Reply: I endorse the ponit-wise explanation offered by Yagay Sir Reply By Shilpi Jain: The Reply: In case it is a procurement from an unregistered person then issuing a self invoice now and availing credit is possible. Issuing invoice af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter 30 day time limit can be regarded as a procedural violation and cannot deny credit altogether.<br> Discussion Forum - Knowledge Sharing ....