Reverse charge - availment of tax paid under rcm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 May 2013 Issue:
When we discharge the tax liablity under RCM and pay Tax in cash..
The tax paid under RCM when can be Set off with the regular liability..
Ex:
April Month:
Tax Liability under RCM 100 and tax liability under regular is 1000.
whether we can set off tax paid under RCM with Regular liability. i.e 1000-100=900 payable for April month.

or we have to set off in next i.e.in May month Regular liability ?

Prashanth

Prashanth (Expert)
Follow

05 May 2013 Hello,

No u cant set-off,however what tax paid under RCM can be availed as credit and can use for out put tax.

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2013 ok Dear Prashanth

Pls clarify me, who will bear the Interest Cost on the Delay of Setting off the RCM credit with Regular Liability?

Ex April Month
RCM i paid Rs.1 Crore and Regular I payable 2 crore.
As per your suggestion
You are saying to pay 1+2=3 crore in the April month and availed the credit of 1 crore in May month against Regular Laiability.

Then Who will bear 1 one month interest cost on RCM i paid in April month?

Upgrade to CAclubindia Pro. Subscribe Now!

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

20 June 2013 RCM cannot be adjusted and the expert has rightly said. Your tax liability has to be paid by you. You cannot take credit for taxes paid by others under RCM

Message likes : 1 times