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All QuestionsCategory: GST ConsultancyQUERY : WRT REVERSE CHARGE ITC
Profile photo of NAMAN K DOKANIANAMAN K DOKANIA asked 4 years ago

QUERY : WRT REVERSE CHARGE ITC

 
Mr. A registered in GST, incurs freight in FY 2018-19, and draws the liability in books of accounts in FY 2018-19, and makes the payment in FY 2019-20. He didn’t make the payment on account of reverse charge u/s 9(3) of the CGST Act, 2017 in FY 2018-19. While performing the GST Audit & GSTR-9, I found the same, and now Mr. A wants to pay tax and wants to take the ITC. 

Question.1: Can he do so in GSTR9 and take the ITC in FY 2019-20?
Question 2: Can he show in March 2020 GSTR 3B of FY 2019-20 and claim ITC??

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3 Answers
Profile photo of Nikhil GuptaCA Nikhil Gupta answered 4 years ago

If the client has not created the RCM liability in books in 2018-19, then he can make payment and take the credit now through GSTR-3B

Profile photo of Palash KhurpiaPalash Khurpia answered 4 years ago

Firstly, please check that the payment has been made towards services taken from Goods Transportation Agency i.e. any person who provides service in relation to transport of goods by road and issues consignment note. 
If service has been provided by GTA then adhere to the time limit for claiming ITC as per Section 16 (4) of CGST Act
As per sub-section 4 of Section 16 of CGST Act, restricts the time limit for availing of ITC. ITC must be claimed earlier of :
(i) the due date of furnishing of the return under section 39 (GSTR-3B) for the month of September following the end of F.Y. or,
(ii) the due date of furnishing of the relevant annual return
Thus, any ITC pertaining to F.Y. 2018-19 can be claimed up to 20th October 2019 (i.e. due date of filing GSTR-3B for the month of Sep 2019)
However, if the amount of such ITC is huge, then in my view you should take the credit and challenge the validity of section 16 (4) in the court. The Supreme Court as well as of various High Courts which have said in their judgments that ITC is a substantive right and it cannot be denied once the conditions for availment are fulfilled.

Profile photo of Palash KhurpiaPalash Khurpia answered 4 years ago

There are various other defenses which may be taken in the court of law for availing such ITC.


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