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TMI BlogClarification on time limit under section 16 (4) of MGST Act, 2017 in respect of RCM supplies received from unregistered personsX X X X Extracts X X X X X X X X Extracts X X X X ..... For the uniformity, it has been decided that the said Circular issued by the CBIC is being made applicable, mutatis mutandis, in implementation of the MGST Act, 2017. Copy of the referred CBIC Circular is attached herewith. This Trade Circular is clarificatory in nature. Difficulty if any, in the implementation of this Circular may be brought to the notice of the office of the Commissioner of State Tax, Maharashtra. (ASHEESH SHARMA) Commissioner of State Tax, Maharashtra State, Mumbai. Circular No. 211/5/2024-GST F. No. CBIC-20001/4/2024-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing **** North Block, New Delhi Dated the 26 th June, 2024 To, The Principal Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laims input tax credit on such tax paid. 1.2 It has been represented that some of the field formations are taking the view that in such cases, the relevant year of the invoice for the purpose of section 16 (4) of CGST Act is the year in which the said supply was received and accordingly, the time limit for availment of ITC under section 16 (4) of CGST Act is only upto the September/ November of the following financial year, i.e. the financial year following the financial year in which the said services was received. On the other hand, industry has represented that as the invoice in respect of such supplies received from unregistered supplier, where tax has to be paid by the recipient on RCM basis, is to be issued by the recipient as per sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered person, who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both. Accordingly, where the supplier is unregistered and recipient is registered, and the recipient is liable to pay tax on the said supply on RCM basis, the recipient is required to issue invoice as per section 31(3)(f) of CGST Act and pay the tax in cash on the same under RCM. 2.4 section 16 (4) of CGST Act, as amended vide the Finance Act, 2022, deals with time limit to avail ITC, and is reproduced below- A registered person shall not be entitled to take input tax credit in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such other tax paying documents as may be prescribed. 2.6 A combined reading of the above provisions leads to a conclusion that as ITC can be availed by the recipient only on the basis of invoice or debit note or other duty paying document, and as in case of RCM supplies received by the recipient from unregistered supplier, invoice has to be issued by the recipient himself, the relevant financial year, to which invoice pertains, for the purpose of time limit for availment of ITC under section 16 (4) of CGST Act in such cases shall be the financial year of issuance of such invoice only. In cases, where the recipient issues the said invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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