RCM Liability/ITC Statement introduced on GST Portal

Summary: In August 2024, the GST Portal introduced a new RCM Liability/ITC Statement to help taxpayers manage their reverse charge mechanism (RCM) liabilities and input tax credit (ITC) claims. Accessible under Services > Ledger > RCM Liability/ITC Statement, this feature helps reconcile discrepancies between RCM liabilities declared in Table 3.1(d) and ITC availed in Table 4(A)(2) or 4(A)(3) of GSTR-3B. Taxpayers are required to report any opening balance, either positive or negative, depending on whether RCM liabilities exceeded claimed ITC or vice versa. Adjustments can be made for past RCM ITC reversals, though they must be reported separately. Monthly filers should report balances based on July 2024 GSTR-3B filings, while quarterly filers should consider Q1 of FY 2024-25. The deadline to report the opening balance is October 31, 2024, with amendments allowed until November 30, 2024, offering up to three correction opportunities. This new system provides greater clarity in tracking RCM-related tax obligations and ITC eligibility. Read: New RCM Liability/ITC Statement on GST Portal

RCM Liability/ITC Statement introduced on GST Portal w.e.f. Aug 2024

On a similar concept of ITC reclaimable statement as introduced last year, a new statement called ‘RCM Liability/ITC Statement’ has been introduced on the GST Portal.

NAVIGATION ON GST PORTAL

Services >> Ledger >> RCM Liability/ITC Statement.

WHAT BALANCE TO BE REPORTED AS OPENING BALANCE IN RCM ITC STATEMENT

1. Where excess RCM liabilities has been declared in Table 3.1(d) of GSTR-3B as compared to corresponding ITC availed in Table 4(A)(2) or 4(A)(3) of GSTR-3B, due to any reason whether ITC not claimed being ineligible or missed to claim or RCM paid in case of advance payment etc.- Fill positive differential value as RCM ITC as opening balance in RCM statement.

For example, if you have paid RCM taxes for Rs. 1,00,000/- and declared the same in Table 3(1)(d) of GSTR 3B, whereas availed RCM ITC for Rs. 80,000/- in Table 4(A)(2) or 4(A)(3) of GSTR-3B- You need to fill the amount 20,000/- as opening RCM ITC in RCM statement.

2. Where excess RCM ITC has been availed in Table 4(A)(2) or 4(A)(3) of GSTR-3B however corresponding liability has not been paid by declaring the same in Table 3.1(d) of GSTR-3B- Fill negative differential value as RCM ITC as opening balance in RCM Statement.

For example, if you have claimed RCM ITC for Rs. 75,000/- in Table 4(A)(2) or 4(A)(3) of GSTR-3B whereas paid RCM taxes for Rs. 50,000/- in Table 3(1)(d) of GSTR 3B- You need to fill the amount -25000/- as opening RCM ITC in RCM statement.

3. Where taxpayer need to reclaim the RCM ITC, which was reversed in earlier tax periods through Table 4(B)(2) of GSTR-3B, if eligible, he can reclaim such RCM ITC in Table 4A(5) of GSTR-3B and such RCM ITC shall not be reclaimed through Table 4(A)(2) and 4(A)(3) of GSTR-3B- Thus, such RCM ITC reversal need not to be reported as RCM ITC opening balance.

PERIOD TO CONSIDER

• Monthly filers: Report opening balance basis the RCM liability and ITC declared till GSTR 3B for the month of July-2024.
• Quarterly filers: Report opening balance basis the RCM liability and ITC declared till GSTR 3B up to Q1 of FY 2024-25 i.e., April-June.

DUE DATE TO REPORT THE RCM OPENING BALANCE

Originally balance in opening- Can be declared till 31.10.2024.

Amendments in Opening Balance- Any rectification of errors committed while declaring the opening balance can be done on or before 30.11.2024. Three opportunities for amendment within the period mentioned will be provided.