24 October 2021
My Query : WE HAVE PAID GST ON FREIGHT UNDER RCM , TIMELY MONTHLY, WE HAVE TAKEN ITC ON RCM ALOS. BUT WE HAVE NOT SHOW LIABILITY IN GSTR 3 B UNDER REVERSE CHARGES. WE HAVE DEBITED TOTAL AMOUNT UNDER RCM AVAILABLE IN CASH LEDGER IN GST AT THE TIME OF ANNUAL RETURN THROUGH DRC-03 , SELF VOLUNATRY, PLEASE CONFIRM WHETHER WE HAVE TO PAY INTERST ON IT OR NO?
06 July 2024
In your situation, where you have paid GST on freight under Reverse Charge Mechanism (RCM) and also claimed Input Tax Credit (ITC) on the same, but did not show the liability in GSTR-3B under reverse charges, and later debited the total amount available in the cash ledger through DRC-03 at the time of annual return, here’s what you should consider regarding interest:
1. **Interest Liability**: According to GST regulations, interest is typically applicable if there is a delay in the payment of tax liability. In your case: - Since you have paid the tax liability through DRC-03 at the time of annual return (assuming this was done before any notice or action by tax authorities), there might be an argument that no interest should be applicable. - However, interest calculation under GST can be complex and can depend on various factors including the timing of payment, filing of returns, and issuance of notices by tax authorities.
2. **Consultation with a Tax Advisor**: To ensure compliance and clarity on whether interest is applicable in your specific case, it’s recommended to consult with a tax advisor or a GST consultant. They can review your specific circumstances in detail and provide guidance based on current GST laws and notifications.
3. **Documentation and Records**: Maintain proper documentation of the payment made through DRC-03 and any communications with the tax authorities regarding this issue. This will help in case of any future queries or audits.
4. **Avoiding Interest**: It's crucial to ensure that future compliance with GST filing and payment requirements is strictly adhered to, to minimize the risk of interest or penalties.
Given the specifics of your case, professional advice tailored to your situation will provide the most accurate guidance regarding the applicability of interest on the GST liability paid through DRC-03.
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