ITC of GST paid under RCM

This query is : Resolved

Abhishek Gupta (Querist)
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11 August 2017 Dear Experts, Request all of you to please let me know the time of availing input tax credit of GST paid under reverse charge. Whether it can be claimed during the month when liability arises or during the month when such taxes are paid. Also request you all to please refer to the sections. It's very very urgent. Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 August 2017 ITC can be claimed uring the month when such taxes are paid.

Abhishek Gupta

Abhishek Gupta (Querist)
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12 August 2017 Thank you Sir for your response. Request you to kindly also refer the section.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 Under GST, Input Tax Credit (ITC) for GST paid under Reverse Charge Mechanism (RCM) can be claimed as follows:

### **Timing for Availing ITC on GST Paid under RCM**

1. **When to Claim ITC:**
- **ITC can be claimed in the month in which the liability to pay GST arises.** This is irrespective of when the actual payment of tax is made. Essentially, the ITC can be availed in the same period when the GST liability is recorded in your books, even if the payment is made in a subsequent period.

2. **Relevant Sections:**
- **Section 16(1) of the CGST Act, 2017:** This section allows a registered person to claim ITC on the tax paid on supply of goods or services or both, provided that the tax is paid and the invoice or debit note is available.
- **Section 16(2)(b) of the CGST Act, 2017:** This section stipulates that ITC can be claimed on the basis of a tax invoice or debit note and that such input tax credit can be availed in the month in which the invoice is recorded in the books of accounts.
- **Rule 36(4) of the CGST Rules, 2017:** This rule elaborates on the conditions for availing ITC, including the requirement of the credit being available in GSTR-2A or GSTR-2B.

### **Steps to Claim ITC for RCM:**

1. **Record the Invoice:**
- When you receive the supply subject to RCM, record the invoice in your books and calculate the GST liability.

2. **Claim ITC in the Relevant GSTR-3B:**
- For the month when the GST liability arises (i.e., when the invoice is recorded), claim the ITC in the GSTR-3B for that month.

3. **Payment of GST:**
- Ensure that the GST paid under RCM is remitted to the government account. Payment of GST is required to be made by the due date specified for the payment of tax.

4. **Reconciliation:**
- Reconcile the ITC claimed with the liability paid to ensure consistency with your records and compliance with GST rules.

### **Example Scenario:**

- **Invoice Date:** 10th March 2023
- **GST Liability (RCM):** Rs. 10,000
- **Payment Date:** 15th April 2023

**Claim ITC:**
- You should claim the ITC in the GSTR-3B for March 2023, as the GST liability arises in March 2023 when the invoice is recorded, even if the payment is made in April 2023.

### **Summary:**

You can avail ITC for GST paid under RCM in the month when the GST liability arises, which is generally when the invoice is recorded in your books. Ensure that you follow the relevant sections and rules for compliance. For detailed and specific advice, consulting a tax professional or GST consultant is recommended.

Feel free to ask if you have any more questions!