Input tax credit of amount paid under rcm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2018 Should I take of ITC of amount paid under RCM in the same month or in the following month?

Since, as per Sec. 16(2)(c) of CGST Act, 2017, it has been mentioned that credit can be taken after payment of tax to the Govt. However, Sec. 41 of CGST Act, 2017 states that any registered person can taken eligible ITC on provisional basis !!

Saket Agarwal

Saket Agarwal (Expert)
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25 June 2018 Hi. Section 16(2)(c) starts with the words "subject to the provisions of section 41" and hence provision for claiming provisional credit would be given preference. Also section 41 is to be read with Rule 36(b) which allows credit of GST paid on RCM basis on issue of self invoice and that too "subject to the payment of tax". Hence provisionally the credit of RCM supplies can be taken in the same month with the condition that the tax is finally paid.

The condition specified in 16(2)(c) is also not met in case of forward charge (because the buyer will take credit as soon as he receives the invoice and the seller will only pay the tax in the next month when filing GSTR-3B). Hence 16(2)(c) is made subject to 41 which allows provisional input tax credit.