One of our client is GTA and they are issuing Tax Invoice on RCM . There is no output tax liability of GST during The F.Y.18-19. He has spent lot of money on repair and maintenance, purchase of truck etc . Huge amount of GST is paid by them suppose Rs 4 lakhs GST is paid by them and same is also reflecting in GSTR-2A.
Can he claim ITC in GSTR-3B or can he apply for refund of ITC or not?
ANSWER
Facts of the case:
GTA is providing services on RCM basis and is not paying any output tax. ITC balance of 4,00,000 is standing to the credit of his account.
Law Applicable:
(i) Entry no. 1 of Notification 13/2017 of CGST enlists GTA as a service on which tax shall be payable on reverse charge basis if the rate of tax opted is 2.5%+2.5%, i.e 5%.
(ii) Entry no. 9(iii) of Notification 11/2017 CGST dictates that 2.5% CGST (and 2.5% SGST) shall be levied "Provided that credit of input tax charged on goods and services used in supplying the service has not been taken"
Interpretation: If GTA is paying tax on reverse charge basis then by the combined read of above mentioned notifications, it is evident that booking ITC is not possible by the GTA service provider.
Conclusion: Since GTA service provider can not avail ITC in this case, there is no question of refund of the same.
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