Introduction to RCM Liability/ITC Statement
Introduction to RCM Liability/ITC Statement On August 23rd, 2024, a significant update was introduced to the GST Portal to assist taxpayers in accurately reporting Reverse Charge Mechanism (RCM) transactions. The introduction of the RCM Liability/ITC Statement is a major step towards enhancing the accuracy and transparency of RCM transactions by capturing both the RCM liability reported in Table 3.1(d) of GSTR-3B and the corresponding Input Tax Credit (ITC) claimed in Table 4A(2) and 4A(3) of GSTR-3B for the specified return period.
Introduction to RCM Liability/ITC Statement This new statement will be applicable from the tax period of August 2024 onwards for monthly filers and from the July-September 2024 period for quarterly filers. To access the RCM Liability/ITC Statement, taxpayers can follow this navigation: Services >> Ledger >> RCM Liability/ITC Statement.
Reporting Opening Balance in RCM ITC Statement
Taxpayers can report their RCM ITC opening balance by following these steps:
– Login >> Report RCM ITC Opening Balance
– Or: Services >> Ledger >> RCM Liability/ITC Statement >> Report RCM ITC Opening Balance
Scenarios for Reporting Opening Balance
- Excess Paid RCM Liability without Corresponding ITC:
If a taxpayer has paid excess RCM liabilities by declaring them in Table 3.1(d) of GSTR-3B but has not availed the corresponding ITC in Table 4(A)2 or 4(A)3, they need to report a positive value of this excess paid liability as RCM ITC in the opening balance.
- Excess Claimed RCM ITC without Corresponding Liability:
If a taxpayer has availed excess RCM ITC through Table 4(A)2 or 4(A)3 of GSTR-3B without paying the corresponding liability declared in Table 3.1(d), they must report a negative value of this excess claimed ITC as RCM in the opening balance.
- Reclaiming Reversed RCM ITC:
If a taxpayer needs to reclaim RCM ITC that was reversed in earlier tax periods through Table 4(B)2 of GSTR-3B and is eligible, they can reclaim it in Table 4A(5) of GSTR-3B. Introduction to RCM Liability/ITC Statement Note that such RCM ITC should not be reclaimed through Table 4(A)2 and 4(A)3. Additionally, this does not need to be reported as an opening balance in the RCM ITC Statement.
Reconciliation for Opening Balance Reporting
– Introduction to RCM Liability/ITC Statement Monthly Filers: Report the opening balance considering RCM ITC till the July 2024 return period.
– Quarterly Filers: Report the opening balance up to Q1 of FY 2024-25, considering RCM ITC till the April-June 2024 return period.
Key Deadlines
Declaration of Opening Balance: The opening balance can be declared until October 31, 2024
Amendments to Opening Balance: Taxpayers have the opportunity to rectify any errors in declaring the opening balance until November 30, 2024. Introduction to RCM Liability/ITC Statement Three amendment opportunities will be provided during this period. After November 30, 2024, this amendment facility will no longer be available.
Conclusion
The introduction of the RCM Liability/ITC Statement is a crucial development for taxpayers dealing with RCM transactions. By ensuring accurate reporting of liabilities and ITC claims, this statement enhances transparency and helps taxpayers avoid discrepancies in their GST returns. Adhering to the timelines for reporting and amendments will be essential for maintaining compliance and avoiding potential issues with the tax authorities.
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