Are we applicable for itc reversal as per rule 42 & 43?

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Bijal Patel (Querist)
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17 January 2018 We are not paying Reverse Charges from Oct'2017 as suspended till 31st march'18
Are we Applicable for "(B) ITC Reversed (1) As per Rule 42 & 43 of CGST/SGST rules" In GSTR-3B Return (Cloumn 4 Eligible ITC).

Bijal Patel

Bijal Patel (Querist)
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19 January 2018 Are we applicable for itc reversal as per rule 42 & 43?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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14 July 2024 If your business was not liable to pay GST under reverse charge mechanism (RCM) from October 2017 to March 2018 because the RCM provisions were suspended during that period, you would not be required to reverse input tax credit (ITC) under Rule 42 or Rule 43 of the CGST/SGST Rules during that time frame.

Here’s a breakdown of the relevant rules and their applicability:

1. **Reverse Charge Mechanism (RCM) and ITC Reversal**:
- Under the GST regime, certain goods and services are subject to reverse charge where the recipient of the goods or services is liable to pay GST instead of the supplier.
- When GST is paid under reverse charge, the recipient can claim ITC for the GST paid.
- Rules 42 and 43 of the CGST/SGST Rules deal with the reversal of ITC where the recipient has not paid the supplier within the specified time frame.

2. **Suspension of RCM**:
- From October 2017 to March 2018, the RCM provisions were suspended for all registered persons. This means that during this period, businesses were not required to pay GST under reverse charge for any supplies.
- Since RCM was suspended, there would be no requirement to reverse ITC under Rule 42 or Rule 43 during this period because there was no GST liability under RCM.

3. **GSTR-3B Return**:
- In GSTR-3B, which is a summary return, the column for "Eligible ITC" (Column 4) generally includes the total input tax credit that can be claimed for the period.
- If you did not have any ITC to reverse under Rule 42 or Rule 43 due to the suspension of RCM, you would enter zero in the relevant sections for ITC reversed under these rules in GSTR-3B.

### Conclusion:
Since RCM was suspended from October 2017 to March 2018, you would not have any ITC to reverse under Rule 42 or Rule 43 during that period. Therefore, you should not enter any amount under "(B) ITC Reversed (1) As per Rule 42 & 43 of CGST/SGST rules" in GSTR-3B for the months in which the RCM provisions were suspended.

It’s advisable to maintain proper records and documentation to support this position in case of any future audits or inquiries by tax authorities. If in doubt, consulting with a GST expert or tax advisor can provide further clarity based on the specifics of your business operations.

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