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How to withdraw ITC to my bank account

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Tax_Noob

Taxpayer

37 Points Posted on 14 February 2022

I'm freelancer on Upwork and I paid GST under reverse charge mechanism on upwork service fee/commission they charge me.

Im not even sure whether I'm suppose to pay RCM on that or not because some CAs says Yes and some No, so not sure whom to believe. But to be on safe side I paid it anyway. If you have any insight on this you are welcome to share. refer: https://www.caclubindia.com/forum/am-i-liable-to-pay-gst-under-reverse-charge-mechanism--584965.asp

So I claimed ITC of same amount as RCM. now I got this ITC balance under Electronic Credit Ledger.

Will I ever be able to withdraw this balance? If yes, How can I do that?

Will I be able to use this credit to pay next month's RCM?

Replies (2)

Quick Summary

A UK freelancer using Upwork is seeking clarity on paying GST under the reverse charge mechanism (RCM) on service fees. They paid the RCM and claimed the Input Tax Credit (ITC), which is now sitting in their electronic credit ledger. The core question is whether this ITC balance can be withdrawn to their bank account or used to offset future RCM payments. Advice suggests that while RCM typically requires cash payment, it can be adjusted against other taxable supplies. For exporters of services, a refund might be possible, but this depends on various compliance factors.

Avik Chanda

Accountant

107 Points Posted on 15 February 2022

RCM has to be paid by cash only, you can adjust the same if you have other taxable supplies.

CA Altamush Zafar

GST Consultant

10402 Points Posted on 15 February 2022

You can claim refund since you are doing export of service. However refund will depend on numerous factors including compliances you have done regarding that.