The Goods and Services Tax Network ( GSTN ) has issued a new advisory on the new statement titled “RCM Liability/ITC Statement” on the Goods and Services Tax ( GST ) Portal to assist taxpayers in accurately reporting Reverse Charge Mechanism ( RCM ) transactions.
This statement aims to enhance the transparency and precision of RCM reporting by capturing RCM liability as outlined in Table 3.1(d) of GSTR-3B, along with the corresponding Input Tax Credit (ITC) claimed in Table 4A(2) and 4A(3) of GSTR-3B for any given return period.
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This new tool is set to be applicable from the tax period of August 2024 for monthly filers, and from the July-September 2024 quarter for quarterly filers. Taxpayers can access the RCM Liability/ITC Statement through the navigation path: Services >> Ledger >> RCM Liability/ITC Statement.
Reporting Opening Balance in RCM ITC Statement:
Taxpayers who have already paid excess RCM liabilities but have not availed the corresponding ITC will need to fill in a positive value for the excess paid RCM ITC as an opening balance.
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Conversely, if taxpayers have availed excess RCM ITC but have not declared the corresponding liability, they are required to report a negative value for the excess claimed ITC as RCM in the opening balance.
For taxpayers reclaiming RCM ITC that was previously reversed, the reclaimable ITC can be reported in Table 4(A)(5) of GSTR-3B. Notably, such reversals should not be reported as RCM ITC opening balances.
Reconciliation and Deadlines:
Monthly Filers – The opening balance should be reported by considering RCM ITC till the July 2024 return period.
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Quarterly Filers – Report the opening balance up to Q1 of FY 2024-25, considering RCM ITC till the April-June 2024 return period.
The deadline for declaring the opening balance is October 31, 2024.
Taxpayers have the opportunity to amend any errors in their declared opening balance until November 30, 2024, with up to three opportunities provided for rectification.
The GSTN has also indicated that the amendment facility will be discontinued after November 30, 2024.
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