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ITC for tax paid under RCM

RCM 1019 views 1 replies

I have to pay GST under RCM for rent paid to unregistered dealer. This payment has been included in GSTR3B fr March month. In which month's GSTR 3B should I claim Input tax credit for this GST paid. When I am putting it in 3B of March itself, it shows us a warning that ITC is more than that appearing in 2B (even though we have paid this tax in cash). Should we ignore the warning and proceed with filing or claim it in the next month i.e April (Will it appear in 2B of April). 

Replies (1)

When you pay GST under the Reverse Charge Mechanism (RCM) for rent paid to an unregistered dealer, you are eligible to claim Input Tax Credit (ITC) on the tax paid. However, the timing of claiming ITC depends on when the tax is paid and when it appears in GSTR-2B. Since you have already included the GST payment in GSTR-3B for March, the ITC should ideally be claimed in the same month. However, the warning you are seeing—about ITC exceeding the amount in GSTR-2B—occurs because RCM transactions do not appear in GSTR-2B, as the tax is paid directly by the recipient rather than being reported by a supplier. You can ignore the warning and proceed with filing GSTR-3B for March, as ITC on RCM payments is allowed in the same month when the tax is paid. It will not appear in GSTR-2B for April, since GSTR-2B only reflects invoices uploaded by suppliers, and RCM transactions do not follow this process. For confirmation, you may refer to discussions on ITC for tax paid under RCM here. If you need further clarification, consulting a tax professional or referring to official GST guidelines would be advisable.


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