| Question And Answer | |
|---|---|
| Subject: | CAN SERVICE TAX ON RCM BASIS PAID AS CGST NOW BE CLAIMED AS ITC IN GST REGIME |
| Category: | GST |
| Querist: | KARAN SHAH |
| Answered by: | Advocate C.B.Thakar |
| Tags: | GST- Service tax, RCM, service tax |
| Date: | August 23, 2021 |
Liability of SERVICE TAX on RCM basis on service received of GTA was determined by the department. The assessee – partnership firm has paid such liability by making payment under the head CGST (as there was no service tax registration and officer told to make payment under CGST). Can the partnership firm claim ITC of such CGST paid in GST now.
ITC is eligible as per section 16 of the CGST Act, 2017.
The relevant section reads as under:
“16.Eligibility and conditions for taking input tax credit.— (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.”
Thus, the registered person can take credit of input tax charged. The definition of Input tax as per section 2(62) is as under:
“(62) ―input tax in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes—
(a) the integrated goods and services tax charged on import of goods;
(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or
(e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy;”
Therefore, input tax includes the taxes charged under GST Acts and not under any earlier law like Service Tax.
In light of above restriction, the querist cannot avail the ITC of the Service Tax paid on RCM basis, though it is paid under CGST.