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TMI BlogClarification on time limit under Section 16(4) of the WBGST Act, 2017 in respect of RCM supplies received from unregistered persons.X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (hereinafter referred to as the WBGST Act ) for the purpose of availment of input tax credit (ITC) by the recipient on the tax paid by him under reverse charge mechanism (RCM) in respect of supplies received from unregistered persons. It has been represented that in some cases, where tax is payable on reverse charge basis by the recipient, such as, where an activity is performed by the overseas related person for the entity located in India and no consideration is involved, such an activity may not be considered as supply of services by the concerned recipient in India and accordingly, no invoice is issued as well as no tax is paid by the said recipient under RCM in respect of the same. However, later on, either on their own on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Commissioner, in exercise of his powers conferred under section 168 of the WBGST Act, hereby clarifies the issue as follows. 2.1 As per section 16(2)(a) of WBGST Act, 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 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. 2.2 Rule 36(1)(b) of the West Bengal Goods and Services Tax Rules, 2017 (hereinafter referred to as the WBGST Rules ) prescribes that input tax credit shall be availed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows: A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. 2.5 It can be seen that section 16(4) of WBGST Act links the time limit for ITC availment with the financial year to which the invoice or debit note pertains. As discussed in Para 2.3 above, in case of supplies where the supplier is unregistered and recipient is registered and the tax has to be paid by the recipient on RCM basis, the recipient is require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of WBGST Act will be the financial year in which the invoice has been issued by the recipient under section 31(3)(f) of WBGST Act, subject to payment of tax on the said supply by the recipient and fulfilment of other conditions and restrictions of section 16 and 17 of WBGST Act. In case, the recipient issues the invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax. Further, in cases of such delayed issuance of invoice by the recipient, he may also be liable to penal action under the provisions of Section 122 of WBGST Act. 3. Difficulty, if any, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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