The Commissioner of State Tax, Maharashtra on July 04, 2024, issued a notification regarding the Clarification on the time limit under Section 16(4) of MGST Act, 2017 in respect of RCM supplies received from unregistered persons.
The Circular issued by CBIC is being made applicable mutatis mutandis in implementation of the MGST Act, 2017. The CBIC circular stated the following namely: -
• It is prescribed that input tax credit shall be availed by a registered person inter alia on the basis of an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of section 31 of CGST Act, subject to the payment of tax.
• Further, it is stated that 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. Accordingly, where the supplier is unregistered and the recipient is registered, and the recipient is liable to pay tax on the said supply on an RCM basis, the recipient is required to issue an invoice and pay the tax in cash on the same.
• Supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and where invoice is to be issued by the recipient of the supplies, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act will be the financial year in which the invoice has been issued by the recipient, 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 CGST 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 the CGST Act.
[Notification No. JC(HQ)-5/AR-2/GST/2024/ADM-8/B-75]
