Based on the current GST guidelines, here is how you should handle Reverse Charge Mechanism (RCM) payments made after the end of the financial year:
1. Timing of Reporting
You must report the RCM tax and the associated Input Tax Credit (ITC) in the GSTR-9 of the financial year in which the tax was actually paid, not the year in which the transaction originally occurred. This is a standard practice clarified by the GSTN (supported by a CBIC press release).
2. How to Report in GSTR-9
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Do not report in the previous year's GSTR-9: If you paid the RCM for a previous year in the current financial year, it should not appear in the annual return of the previous year.
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Report in the year of payment: Include the RCM liability and the corresponding ITC in the GSTR-9 of the financial year during which the payment was made.
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Table 9: This table captures the tax payable and paid as per your returns (GSTR-3B) for the current financial year. Since the RCM payment was made via a GSTR-3B filed in the current year, it will naturally be reflected here.
3. Key Considerations
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Payment Method: Remember that RCM liabilities must be paid in cash through the Electronic Cash Ledger. You cannot use ITC to discharge RCM liabilities.
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Interest: If the RCM payment was delayed, ensure that the applicable interest is also paid and accounted for in your records.
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GSTR-9C Reconciliation: If there is a mismatch between your books of accounts and the GST returns due to the timing of these payments, you can provide an explanation in Table 13 of GSTR-9C (if applicable). This ensures transparency and helps justify the differences to tax authorities during audits.
Summary:
For RCM tax paid after the close of a financial year, do not report it in the GSTR-9 of the previous year. Instead, report the tax payment and the related ITC in the GSTR-9 of the financial year in which the payment was actually made in your GSTR-3B. Any resulting reconciliation differences can be explained in Table 13 of GSTR-9C.