Since the aforesaid clause stipulates a time limit for claiming ITC in respect of any invoice, it is important to understand meaning of the term “invoice”. In this context, section 2 ibid reads:

“In this Act, unless the context otherwise requires,– … (66) invoice or tax invoice means the tax invoice referred to in section 31;”

Sub-sections (1) and (2) of section 31 ibid mandates issue of ‘tax invoice’ by the supplier for making taxable supplies of goods and services, respectively, apart from specifying a time-limit for issue of such invoice(s). Further, section 31(3)(f) ibid reads:

“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;”

From a combined reading of the aforesaid provisions, it is evident that for taxable goods / services (entailing reverse charge) received from:

• a registered supplier – tax invoice shall be issued by such supplier;
• an unregistered supplier – invoice (colloquially termed as ‘RCM self-invoice’) shall be raised by the recipient.

One may note that sub-sections (1) and (2) of section 31 ibid refer to ‘tax invoice’ while section 31(3)(f) ibid refers only to ‘invoice’, and quip hyper-technically that invoice under section 31(3)(f) ibid is not a ‘tax invoice’. However, the following aspects may be viewed in counter:

• Rule 46 of CGST Rules, 2017 (which prescribes mandatory contents of a tax invoice) applies to RCM self-invoice too – this is evident from the second proviso therein. Further, such mandatory contents include inter alia the quantum of GST payable;
• Also, Rule 36(1) ibid mandates availability of invoice issued by supplier under section 31 of the CGST Act or RCM self-invoice issued under section 31(3)(f) ibid (subject to payment of tax) for availing ITC.

Hence, the term “invoice” in section 16(4) ibid appears to include invoice received / raised for reverse charge supplies under section 31 ibid.

A proviso was inserted under Section 16(4) ibid, with effect from December 31, 2018, to extend the time-limit to avail ITC for the period July 2017 to March 2018. The proviso is reproduced hereunder (emphasis added):

“Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice … made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.”

The emphasised portion in the aforesaid proviso clearly lays down that the extension of time-limit to avail ITC is available only if all the following conditions are satisfied:

• The invoice(s) should pertain to the period July 2017 to March 2018;
• Such invoice(s) should be uploaded by the supplier in GSTR-1; and
• Such invoice(s) should be uploaded on or before the due date of filing GSTR-1 for March 2019.

It should be noted that ‘uploading of invoices’ as aforesaid is distinct from ‘furnishing of serial numbers of invoices’ issued during a tax period in the common portal under Rule 48(3) of CGST Rules. Since uploading of invoices by supplier practically happens only in case of forward charge, it is evident that the lawmaker has intently drafted the proviso with a view to extend the time-limit to avail ITC under forward charge (for 9M, 2017-18). Else, the lawmaker could have simply stopped with the non-underlined portion in the above extract.

This also highlights the risk for taxpayers who availed ITC (during October 2018 to March 2019) of GST paid under reverse charge (for the period July 2017 to March 2018). However, a few are quick to quote paragraph (g) of the Ministry of Finance press release dated July 03, 2019. The relevant extract of the said release reads:

“Many taxpayers have requested for clarification on the appropriate column or table in which tax which was to be paid on reverse charge basis for the FY 2017-18 but was paid during FY 2018-19. It may be noted that since the payment was made during FY 2018-19, the input tax credit on such payment of tax would have been availed in FY 2018-19 only. Therefore, such details will not be declared in the annual return for the FY 2017-18 and will be declared in the annual return for FY 2018-19. …”

It is key to note that the said press release remains silent whether GST paid under reverse charge can be claimed as ITC during the first half-year or the full year of 2018-19. While readers would be ready to quip that the phrase “FY” is used in the said release, they should also be aware that a press release cannot override a legislation.

A popular question from taxpayers (who belatedly pay GST under reverse charge) is whether ITC can be claimed in the tax period in which RCM self-invoice is issued. For example, suppose reverse charge liability arose (for goods or services received) during 2018-19, can the RCM self-invoice be issued in October 2019 and ITC be claimed thereafter?

Ironically, while GSTR-1 captures the details of outward supplies, Sl.No.2 of Table 13 (titled “Documents Issued”) therein captures the details of invoices issued for inward supply from unregistered person. That is, the serial numbers of RCM self-invoices should be entered therein.

In this context, it is pertinent to refer the proviso to section 37(3) ibid, which reads that:

“Provided that no rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier:”

Section 37(1) ibid mandates filing of GSTR-1, which is prescribed as part of the CGST Rules. Hence, from the said proviso, it can be deciphered that rectification of any omission in GSTR-1 (say, of the period 2018-19) is allowed only up to earlier of the following dates: (i) date of filing GSTR-3B of September 2019; and (ii) date of filing GSTR-9 of 2018-19.

At this juncture, some readers may point that the aforesaid time limit does not apply to RCM self-invoices since: (i) Section 37(1) ibid applies only to details furnished in GSTR-1, which are communicated to the recipient; and (ii) that RCM self-invoice is not communicated to the recipient. However, it is well known that even details related to B2C and export invoices furnished in GSTR-1 (which are not communicated to recipients) cannot be edited beyond the said time limit. Hence, it appears that the proviso to Section 37(3) ibid applies to all details furnished in GSTR-1, whether communicated to the recipient or not. Also, under the self-assessment regime, it is not feasible to expect that error or omission in GSTR-1 be rectified irrespective of time limit.

In view of the foregoing, any omission to include the serial numbers of RCM self-invoices (for goods / services received in 2018-19) cannot be rectified beyond the date of filing GSTR-3B of September 2019, since GSTR-9 for 2018-19 could not have been filed before such date. In fact, non-reporting of serial numbers of RCM self-invoices in GSTR-1 could be viewed as non-compliance with Rule 36(1) ibid, prompting disallowance of ITC arising from such unreported RCM self-invoices. Hence, belated issue of RCM self-invoice (beyond the period stipulated under law as aforesaid) may impact ITC eligibility.

Having analysed supra that RCM self-invoice cannot be belatedly raised, the next question pops up whether any time limit is prescribed for issuing such RCM self-invoice. A close look at Section 31 ibid indicates that time limit has been prescribed for raising: (i) tax invoice by the supplier of goods / services; (ii) revised invoice; (iii) receipt voucher; (iv) payment voucher; (v) invoice in case of continuous supply of goods or services; and (vi) invoice in case of goods sent or taken on approval for sale or return.

In this context, the loose drafting of Section 31(3)(f) ibid throws two possibilities: (i) whether RCM self-invoice should be issued on the date of receipt of goods / services from unregistered supplier; or (ii) whether RCM self-invoice should be issued when goods / services are received from a supplier (who is unregistered on the date of receipt of goods / services). However, given the background of Section 31 ibid, which details the time limit within which various documents prescribed under law should be raised (as discussed supra), it appears that RCM self-invoice should be issued on the date of receipt of goods / services from unregistered supplier.

A section of the taxpayers, who belatedly avail ITC, query whether ITC can be restricted on the grounds that it is a vested right. It is relevant in this context to refer the Hon’ble Supreme Court’s (SC) decision in ALD Automotive Private Limited v. Commercial Tax Officer – [2018] 99 taxmann.com 202 (SC) – where it was held in favour of the Revenue that conditions (including time limit) can be imposed for claiming ITC. The relevant extract(s) are reproduced hereunder:

“32. The input credit is in nature of benefit/ concession extended to dealer under the statutory scheme. The concession can be received by the beneficiary only as per the scheme of the Statute. … This Court held that Rule making authority can provide curtailment while extending the concession. …

36. This Court further held that it is a trite law that whenever concession is given by a statute the conditions thereof are to be strictly complied with in order to avail such concession. …

38. … The conditions under which Input Tax Credit is to be given are all enumerated in Section 19 as noticed above. The condition under which the concession and benefit is given is always to be strictly construed. In event, it is accepted that there is no time period for claiming Input Tax Credit as contained in Section 19(11), the provision become too flexible and give rise to large number of difficulties including difficulty in verification of claim of Input Credit. …”

In cases involving forward charge, the recipient pays the supplier and the latter deposits GST with the Exchequer. Even though the Government has received the GST, Section 16(4) ibid limits timeline to avail ITC by the recipient.

Similarly, where a registered supplier issues a tax invoice (mandating the recipient to pay GST under reverse charge), the recipient should pay such GST to the Exchequer and can thereafter avail ITC within the timeline specified under Section 16(4) ibid. However, if the recipient fails to pay such GST within the timeline specified under Section 16(4) ibid, ITC claim becomes time-barred from a combined reading of Section 16(4) ibid with Rule 36(1) ibid. It should be noted that RCM self-invoice under Section 31(3)(f) ibid cannot be raised in such cases.

If the timeline to avail ITC is strictly enforceable under the aforesaid two instances, it is hard to fathom how ITC of GST paid under reverse charge can be availed without time limit in cases where RCM self-invoice is issued by the recipient. This includes cases where GST under reverse charge (pertaining to 2018-19, for example):

• was paid in the same fiscal but claimed on or after October 2019; or
• was paid as well as claimed on or after October 2019.

Also, in an era of self-assessment, where GSTR-9 (annual return, summarising the entire year’s transactions) and GSTR-9C (statement, reconciling the figures between the audited books of account and annual return) are required to be filed, it is difficult to envisage a scenario where an assessee pays GST under reverse charge belatedly and claims ITC of such GST too. If it can be argued that such GST be paid and ITC be claimed at the time of filing GSTR-9 (i.e., beyond the period prescribed under proviso to Section 37(3) ibid), it can also be argued that such GST be paid and ITC be claimed beyond the date of filing GSTR-9. Such argument would frustrate the spirit of law, when viewed in the backdrop of Hon’ble SC’s observations in re: ALD Automotive Private Limited supra.