Question
Can we avail ITC of RCM in the same month. while we are paying tax in next month. Earlire it was provisionally available subject to GSTR-2, but GSTR-2 and GSTR 3 filing currently suspended.
Answer
Rule 36 of CGST Rules regarding Documentary
requirements and conditions for claiming input tax credit imposes a condition in
case of a Reverse charge mechanism vide sub rule (1)(b) i.e.
(b) an invoice issued in accordance with the provisions of clause (f) of
sub-section (3) of section 31, subject to the payment of tax
The same condition is also specified in section 16(2) i.e. no registered person
shall be entitled to the credit of any input tax in respect of any supply of
goods or services or both to him unless
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c) 'subject to the provisions of section 41,the tax charged in respect of such
supply has been actually paid to the Government, either in cash or through
utilisation of input tax credit admissible in respect of the said supply
However the condition provides that ITC is eligible subject to payment of tax
but it no where specifies that credit can be availed only after payment of tax.
Further section 41 of CGST Act regarding claim of ITC and provisional acceptance
thereof provides that "Every registered person shall, subject to such conditions
and restrictions as may be prescribed, be entitled to take the credit of
eligible input tax, as self-assessed, in his return and such amount shall be
credited on a provisional basis to his electronic credit ledger." This is a
universal law and applies to section 16 as well as to Rule 36.
Therefore in view of above section you can avail ITC on provisional basis.
(Reply dt.10/08/2018)