QUESTION
 

Where in the GST Law its mentioned that, the Input tax credit in RCM is to be taken in subsequent month of payment of challan. Kindly confirm

ANSWER  
 

Facts of the case:  Whether as per Law, the Input tax credit in RCM is to be taken in subsequent month of payment of challan.

Law Applicable: SECTION 9 OF CGST ACT

(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.

SECTION 16 OF CGST ACT

(2) Notwithstanding anything contained in this section, 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,''

a)      he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
b)      he has received the goods or services or both.

Explanation. 'For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services''

            (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or
               otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
 
           (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.

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 utilization of input tax credit admissible in respect of the said supply; and
d)     he has furnished the return under section 39:---------------------------

Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed

Interpretation: As per the second proviso to Section 16, it is to construed that the input tax credit on the tax paid under RCM will be available only after making payment. 

Hence it will be available in the same month in which the RCM has been admitted and paid and the necessary return as envisaged in Sec.16 of CGST Act, 2017 has been filed.

Conclusion: The credit in case of RCM can be claimed in the same month based on the payment of the same because in the relevant law there is no restriction. (Reply dt.14.12.2020)