Regarding rcm's input claim

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2017 Dear All,
I am working with a publishing house. Here are some of the expenses which is under the RCM. For an example we paid 38000/- rent to our landlord. And we paid 18% RCM(9% CGST & 9% SGST) on Rent.
My question is that we are dealing with educational printed books which are tax free. So we cannot adjusted RCM's input because the books are tax free. If we started from July-2017 month's and end with March-2018 the total amount of RCM will be 6840*9 = Rs. 61560/- .
Can we claim this amount as refund of RCM's ITC from the government.
If yes, Why? or If no, Why?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2017 No as your out put sales is exempt from GST. If you are dealing with only exempt goods cancel GST registration and no need to pay GST for such services under RCM.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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18 September 2017 You can claim refund of ITC paid by you.....

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Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2017 Dear SEETHARAMAN Sir,

According to you we can not claim refund input tax credit for RCM.
But another expert CA Rashmi Gandhi says that We can claim refund of that.
Kindly help me out with reason..

Thanks & Regards

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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18 September 2017 As per Sec 54 Refund of unutilized input tax credit can be claimed in the following two cases under GST: Unutilized input tax credit on zero-rated goods/services on which no payment of tax was made can be claimed as refund.Accumulation of unutilized ITC due to higher tax rate on inputs than the output supplies (other than zero-rated/exempted goods)

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2017 CA Rashmi Gandhi note down the difference in GST on zero rated items and exempt items. Refund can be claimed on zero rated export items. No refund can be claimed on exempt items. Read the provision carefully.
Find the difference between zero rated and exempt items.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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18 September 2017 Thanks Sir. Will again read provision....

RAJA P M

RAJA P M (Expert)
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18 September 2017 Yes. I agreed to Mr SEETHARAMAN Sir..

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RAJA P M

RAJA P M (Expert)
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18 September 2017 In my view.... Also the RCM related payments can't adjustable any other liabilities. It's only we can add as liability and less as ITC for the same URD inwards supplies. The system following as per income tax "Depreciation and SB account Interest". The both amounts like add our computation as income and Less as defection... I think the RCM related activities is the same way. I can't confirm it.... Bcoz, My view is correct then it ll be reflect in GSTR 3....

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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18 September 2017 Check the rulea & act .Agreed to Seetharaman Sir that no ITC available if you deal in exempted goods only....

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2017 I would like to thanks to CA R. SEETHARAMAN Sir & CA RASHMI GANDHI Ma'am.
This would be very helpful for me. Thanks for giving your valuable time and advise.
And the conclusion is that we cannot claim refund of RCM's input. Rather than we can add the value of paid RCM as a expenses. For an example- Rent paid by us of Rupees 38000/- and RCM on Rent @18% of rupees 6840/-.
The entry should be
Dr. Rent 44840/-
Cr. CGST RCM Payable - 6840/-
Cr. TDS Payable @ 10% - 3800/-
Cr. Landlord - 34200/-
Dear All.
Please let me know if there is any mistakes.

Regards
Ravi