ITC on RCM

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This discussion addresses a client who failed to pay Reverse Charge Mechanism (RCM) tax on freight for FY 2017-18 and declared this in their GSTR-9C filing. The core issue is how to now pay the outstanding RCM tax with interest and subsequently claim the Input Tax Credit (ITC) on this paid amount. Experts suggest paying the liability and then claiming the ITC on subsequent GSTR-3B filings, as ITC on RCM is generally available once paid.

Dhandapani Selvaraj

Dhandapani Selvaraj (Querist)
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01 February 2020 one of my client not paid RCM on freight by GSTR3B for the whole FY2017-18. GSTR9 filed and mentioned this non payment issue by GSTR9C. Now, what is the procedure to pay RCM tax along with interest and also procedure for claim ITC on that RCM amount. Is there any provisions specified : no ITC is available for RCM paid by GSTR 9. Any of experts please suggest to claim ITC on the above RCM.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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01 February 2020 If you found that as per books there was RCM liability which was not paid it is better to pay it off and declare in 9C. then claim ITC on RCM paid in subsequent 3B since in my view RCM credit is available on paid basis.

Dhandapani Selvaraj

Dhandapani Selvaraj (Querist)
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04 February 2020 Thanks a lot for your suggession sir.

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