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RCM and Electronic credit ledger

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Gowtham

Student

1174 Points Posted on 30 November 2022

Can we claim ITC in GSTR 3B on the tax paid on supplies received on reverse charge basis. For example, GTA services on transportation of goods.

If yes, kindly confirm whether my understanding is right?

In April Rs 1000 GST is incurred on RCM basis.

In the GSTR 1 for April, we have to admit the RCM liability in GSTR-1 in Table 5.

In the GSTR 3B for April, we have to pay the amount thru electronic cash ledger

In the GSTR 3B for May, we can claim the ITC of 1000.

Right?

Replies (3)

Quick Summary

This discussion clarifies whether Input Tax Credit (ITC) can be claimed in GSTR 3B for taxes paid on supplies received under the Reverse Charge Mechanism (RCM). The consensus is that you can indeed claim this ITC in a subsequent month's GSTR 3B, after paying the liability via the electronic cash ledger in the current month's GSTR 3B. However, a crucial point is raised regarding the eligibility of ITC for specific services like GTA, which may be blocked under Section 17(5) unless you are in the business of providing such services.

kl Bhavana

Student CA Final

422 Points Posted on 30 November 2022

Hi Gowtham,

Yes, your understanding is correct. But please note that ITC against GTA service is ineligible ITC under 17(5) unless you are in the business of transportation.

Thanks
Bhavana K L
bhavana @ lbkca.in
L B K & Associates