When reporting Reverse Charge Mechanism (RCM) liabilities in GSTR-9 that relate to a previous financial year but were paid in the current financial year, the general principle is to report the transaction in the year it was paid.
Key Guidelines for Reporting
According to past clarifications (such as those issued by the CBIC regarding FY 2017-18 taxes paid in FY 2018-19), if you paid RCM liability for a previous year in the current financial year:
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Reporting Year: You should declare this liability in the GSTR-9 of the current financial year (the year in which the tax was actually paid via GSTR-3B).
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Do Not Include in Previous Year's Return: You do not need to amend or reflect this in the GSTR-9 of the previous financial year to which the expense relates.
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Input Tax Credit (ITC): Similarly, the ITC on such RCM payments should be availed and reported in the annual return of the year in which the tax was paid.
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Reconciliation Statement (Form GSTR-9C): If there are any discrepancies in turnover or tax liability between your books of accounts and the GST returns due to this timing difference, you should report these as "unreconciled differences" and provide the appropriate reasons in the reconciliation statement (Form GSTR-9C).
Practical Example
If you had an RCM liability of ₹1,000 for FY 2023-24, of which ₹200 related to FY 2022-23 and was paid in August 2023 (FY 2023-24):
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In the GSTR-9 for FY 2023-24, you report the full ₹1,000 as paid in that year.
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You do not adjust the GSTR-9 for FY 2022-23.
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If your books of accounts show a different liability for FY 2022-23 because of this, you clarify the timing difference in the GSTR-9C for that year.
Disclaimer: GST reporting requirements can be complex and subject to specific portal updates. It is advisable to consult the latest instructions issued by the CBIC or a qualified tax professional to ensure compliance for your specific case.
GSTR-9/9C: GSTN FAQs on RCM and Reporting
This video provides a helpful visual guide on handling adjustments for RCM: RCM Adjustment in GSTR-9. This video is relevant as it explains the practical steps for handling previous year RCM liabilities in your current annual return to avoid notice triggers.