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Time limit for claiming ITC under RCM, Goods and Services Tax - GST

Issue Id: - 117121
Dated: 26-3-2021
Time limit for claiming ITC under RCM

  • Contents

Dear Sir,

One of our clients had paid legal fees to advocates during FY 2019-20 but excluded to deposit RCM on same. On being pointed out during GST Audit, the client has deposited the same with interest however he maintains that he is eligible to claim ITC on the same in GSTR-3B of Mar 2021 i.e. month of deposit.

The basis for same has been stated to be that as per section 31(3)(f), he is liable to self-invoice for RCM supplies from URD persons. Even though the time of supply provisions clearly mandate issue of invoice within 30 days, they do not impose upper limit. As such, in opinion of client he has self-invoiced in March 2021 and as such his claim of ITC is within time as per section 16(4) as same only restricts ITC to Sep of next year from the year in which invoice is issued.

However, in our opinion, same would be contrary to intention of law and ITC would be inadmissible u/s 16(4). What is the view of the experts regarding the same?

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Posts / Replies

Showing Replies 1 to 15 of 42 Records

1 Dated: 26-3-2021
By:- Himansu Sekhar

The provisions speaks about the period to which such invoice pertains. Where is the doubt?

2 Dated: 26-3-2021
By:- Himansu Sekhar

the invoice to be issued under section 31(3)(f), but not for receiving services from unread. persons, but under Sec 9(3)..

3 Dated: 26-3-2021
By:- Himansu Sekhar

unregd. persons

4 Dated: 26-3-2021
By:- Himansu Sekhar

Also there is no time limit for issuance of debit notes under Sec. 34. Still itc availment is restricted under Sec. 16(4) if the same is not for the same period

5 Dated: 26-3-2021

Dear Himanshu ji,

Thank you for your response.

There is no doubt to our mind as evident from our observations given above which are also similar to your opinion. However, since the client has been raising this issue persuasively so it seemed appropriate to discuss it with fellow colleagues. Further as per my understanding, section 31(3)(f) only desires self invoicing only in case of supplies u/s 9(3) from URD suppliers. Relevant extract is as under:

"(f) a registered 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;"

Is there any basis for claim of ITC by client as of date? Or our view of rejection of ITC claim entirely valid? A discussion on same is welcome.

6 Dated: 26-3-2021
By:- Himansu Sekhar

when it pertains to 19-20, no basis for the claim

7 Dated: 26-3-2021
By:- Himansu Sekhar


Sec 9(3) has no relationship with unregd purchases. kindly read section 16(4) carefully. Reverse charge can happen under section 9(3) even if the specified suppliers are regd. For example GTA can be registered. but the recipient will pay gst under reverse charge.

8 Dated: 26-3-2021

Himanshu ji,

I entirely agree. I was only saying that self invoicing is needed only in case of RCM purchases from URD suppliers. But I don't believe it is relevant to this discussion.

I agree with your view.

9 Dated: 26-3-2021
By:- Himansu Sekhar

Just an extension of the discussion albeit not relevant to the topic sir

10 Dated: 26-3-2021

Dear Rohit Goel,

As you rightly pointed out that now the client cannot issue an invoice because it beyond the period of 30 days as envisaged u/r. 47. However, might be debatable. The same raises a very pertinent question, whether issuance of invoice after the period as stated in the Act makes the invoice invalid?

Why do we raise an invoice? We do because (i) evidence supply of goods and services, (ii) determine the time of supply and (iii) Claim ITC. [Broadly three main things]. The time limit for issuance of invoice is 30 days (for services), don’t you think this time limit is solely because to determine the time of supply? Because the government wants to fasten the tax liability on you and all that matter is that there should be an upper limit for fastening the tax liability and to get the revenue to the exchequers. That’s why the time of supply says “the date of issue of invoice by the supplier or the last date on which he is required, under section 31, to issue the invoice with respect to the supply”. So, what I want to convey is the time prescribes for issuance of invoice is only for fastening the tax liability on the registered person. The government is making sure that whether you raise an invoice or not, you better pay after 30 days.

So, what's the loss of raising an invoice after 30 days? The registered person has to pay tax and interest. That’s the loss of the registered person. Though he shouldn’t be deprived of his ITC. [Imagine a bonafide case].

If the registered person has failed to issue an invoice still his/her liability is set by default after 30 days, in such a situation if he/she issues an invoice after that and pay the tax along with the interest from the day of the liability then your client might have a point. Because for ITC you should strictly interpret the provisions. And 16(4) gives your client the room to do so.

Excellent query though.

Just a thought.

11 Dated: 27-3-2021

Dear Sir,

My views are as under :-

The words,'invoice relating to such' were delinked (omitted) from 'debit note' (mentioned in Section 16 of CGST Act) vide Notification No.92/20-CT dated 22.12.20 (effective from 1.1.2021) by Section 120 of the Finance Act, 2020 (12 of 2020). This amendment helps the tax payer to take ITC even after filing of return for September of the subsequent year.

Further it is not in dispute that Recipient of service under RCM is deemed service provider (supplier).

The word, 'tax invoice' mentioned in Section 16 (2) of CGST Act also includes self invoice. It is implied.

In this scenario, time of supply prescribed under Section 13(3) of CGST Act helps the assessee.

In my view, ITC is allowed in this scenario. However, the amendment delinking invoice from debit note is effective from 1.1.21 and period in question pertains to the year 2019-20. Hence issue is not litigation-free. I remember very well, during my service in the department, the department has been issuing SCN notice to the assessees wherein amendment was prospective and period involved was retrospective.

So take the decision in view of all aspects.

12 Dated: 27-3-2021

Thank you KS Sir, its Sec. 13(3), 60 days from the date of issue of an invoice. So, Sec. 13(3) should be in addition to 30 days, wherever i have just referred 30 days. Correction to this extent to my view at reply 10.

13 Dated: 27-3-2021


Sir, My views echo your views. I have added only the departmental angle.

14 Dated: 27-3-2021
By:- GB Rao

Dear sirs,

I feel that when Tax invoice under Section 16(2) includes self invoice also, then the ITC restriction under Section 16(4) also applies on the same. However, the issue is prone to litigation as rightly opined by our experts.

15 Dated: 27-3-2021

Sir, W.e.f. 1.1.21 debit note (it being delinked from invoice) as mentioned above, is independent prescribed document for availing ITC. Debit note also INCLUDES supplementary invoice. Any debit note will relate to outward supply and supply will be by way of tax invoiceo bill of supply. Supply may pertain to tax invoice or bill of supply issued more than one or two or three years ago.So self-invoice is not hit by Section 16(4) because of debit note document, a rescuer.


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