GST Circular No 211/2024
Clarification on Time Limits for ITC on RCM Supplies from Unregistered Persons
This circular clarifies the time limit for claiming Input Tax Credit (ITC) under Section 16(4) of the CGST Act, specifically for supplies received from unregistered persons where tax is paid under Reverse Charge Mechanism (RCM). It addresses confusion about whether the time limit should be based on the financial year of receipt or the year of invoice issuance by the recipient.
The Central Board of Indirect Taxes and Customs confirms that the time limit for ITC claims is based on the financial year in which the invoice is issued by the recipient, not the year the supply was received. For supplies where the recipient is required to issue an invoice and pay tax under RCM, ITC can only be claimed within the financial year of the invoice issuance.
In cases where invoices are issued late, recipients must pay interest on the delayed tax payment and may face penalties. The circular aims to ensure uniform implementation and avoid disputes regarding ITC claims under RCM for supplies from unregistered suppliers
