Rcm on gta and goods

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Gagan Gupta (Querist)
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12 July 2017 Sir,

Please let me know about RCM 5% on GTA services with no ITC that mean RCM paid in cash on monthly basis and no ITC shall be refund in next month.

Ex- I buy transport services more than Rs.750/- single bill by transporter during the month of July'17 a sum of 10,000/- then I have to pay RCM @5% as output RCM Rs.500/- upto 20th Aug.17. my doubt is that paid ITC shall be refunded in month of September'17 as reverse of ITC as input RCM or not.

and the 2nd question about RCM on goods when a registered person buy goods to any unregistered person more than 5000/- in a single day then registered person liable to pay Reverse charge in GST regime on product tax rate wise on monthly basis. as I paid sum as output RCM it shall be refunded in next month as input RCM or not.

Please guide me I very confuse about refund of RCM paid in next month, someone told me It shall not be refundable as input after paid.

CA Pradeep Sharma

CA Pradeep Sharma (Expert)
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12 July 2017 In both the cases you can claim ITC of tax paid under RCM against your output tax liability. If you do not have any output tax liability then you caanot take refund of tax paid under RCM then you can consider RCM as a cost.

Gagan Gupta

Gagan Gupta (Querist)
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12 July 2017 Sir,

Its mean RCM paid shall be refunded as RCM input only next month RCM output amount. and it shall not be adjusted in sales output amount am I right.

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CA Pradeep Sharma

CA Pradeep Sharma (Expert)
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12 July 2017 You can adjust against your sale output amount ....ok let take example for your clearance

If we are providing Job work service for Rs. 118000 (100000+18000GST) and you have made purchase from unregistered dealer for Rs. 50000 now you paying GST let say 10% on RCM on 50000 i.e. 5000 then you can claim such 5000 as input tax credit against output tax liability of Rs 18000 and paid balance 13000( 18000-5000) in cash. You can take ITC only in the month when you paid RCM in cash.

Now, in other case if you are providing exempted supply (i.e. no output tax liability) then you cannot take ITC of RCM then it will be consider your cost.

Thanks