hello
suppose we purchase 100000/- material on reverse charge mechanism in the month of Julyand we increase our tax liability by ₹18000(suppose gsr @ 18%)
Now my question is when we take it credit of ₹18000
1) we pay ₹18000 on due date for July say 10 aug and take ₹18000 ITC in the month of August.
OR
2). we increase our tax liability ₹18000 and club with other output liability and simultaneously increases our ITC and then adjust output liability with our ITC and pay difference in cash.
adding to above example suppose you have liability of 20000, other than the above rcm liability.....now your total tax liability is 38000.....
in the same month you have paid 15000 as gst on input.....now your total itc is 15k +18k =33k....
out of this 33k maximum credit you can take is = total output liability - tax payable under rcm
=38-18
=20k
balance itc will be carried forward = 33k - 20k = 13k
crux is you can take credit of gst paid on rcm basis in the same month but only condition is that total tax paid in cash in that month should not be below the liability under rcm.....
CAclubindia
