ITC of RCM Paid Wrongly

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ITC of RCM Paid Wrongly
Query (Issue) Started By: - Ethirajan Parthasarathy Dated:- 15-6-2020 Last Reply Date:- 16-6-2020 Goods and Services Tax - GST
Got 5 Replies
GST
A person inadvertently pays RCM tax on let us say Municipal Tax paid. Will he be wrong in taking ITC of such tax. The doubt is because the definition of "input tax" will include RCM tax "payable" u/s 9(3) or 9(4). Si .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... nce RCM is not payable at all in the above case, a doubt arises on eligibility of ITC. If input credit is not allowed, can the dealer claim refund of tax. Reply By Ganeshan Kalyani: The Reply: In my view you can take credit. The tax paid under RCM is a revenue neutral to the Govt. unless your final product is exempt. Reply By Alkesh Jani: The Reply: Sir, for which period. As you can adjust .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the the same towards your output liability. Thanks Reply By Rajagopalan Ranganathan: The Reply: Sir, According to Section 15 (2) (a) of CGST Act, 2017 "the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier. Therefore Municipal tax is paid under separate law other than CGST Act, SGST Act, UTGST Act and Goods and Service Tax (Compensation to States) Act the said tax in includible in the trasaction value on which gst is paid/payable. Therefore you can avail ITC of gst paid on Municipal Tax paid under RCM. Rep .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ly By Prasanna Kumar: The Reply: In my opinion, since there is no supply involved(assumed that Municipal tax is paid on brining the goods into the local area or sending out of the loal area) the RCM is paid on wrong expense, hence not eligible for ITC. Probably asking for refund is the best way since it is paid by mistake. Reply By Alkesh Jani: The Reply: Shri As per the definition of "Output .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Tax" given at Section 2(82) of CGST Act, the payment of RCM is required to be paid in cash (not from ITC). Therefore, the person have made a mistake of paying the tax on RCM basis by way of cash, which can be adjusted.
Discussion Forum - Knowledge Sharing .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X