Reversal of credit 16(4)

This query is : Resolved

Hemkumar (Querist)
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30 January 2024 GST Paid under RCM Basis for the month February 2019, in the month of January 2020 and claimed credit of the same in GSTR 3B of February 2019 which was filed in the month of January 2020. Does our credit can be denied under 16(4) ?

CA Altamush Zafar

CA Altamush Zafar (Expert)
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31 January 2024 Yes it can be denied.. although there are varied opinions in this matter. But it will get settled only when courts give a decision on this.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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31 January 2024 Will be hit by section 16(4) as definition of input includes tax paid on reverse charge basis though one can also argue that credit of RCM is available as and when it has been paid in cash.

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CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)
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31 January 2024 If RCM is paid and credit claimed in JAN 2020, then it cannot be denied because RCM ITC is eligible only when paid ( as rightly said by Expert)

RAJA P M

RAJA P M (Expert)
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31 January 2024 No, ITC can't be taken. Bcoz, The Payable Tax in Feb-19. Also ITC claim time limit is sep19/dec19. But, Liability paid & Claimed in Jan-20. The ITC can't be available.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)
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01 February 2024 You can refer to this Article , that will give you indept detail analysis of RCM ITC viz-a-viz Sec 16(4)

https://taxguru.in/goods-and-service-tax/admissibility-itc-rcm-section-164-limitation.html