Page 39 - GSTL_18th June 2020_Vol 37_Part 3

2020 ] GST SECTION 16(4) — TIME-LIMIT FOR AVAILMENT OF ITC — AN OVERVIEW J73
Thus, recipient of goods or services liable to pay GST under Section 9(3) of the
CGST Act, 2017 (under Reverse Charge Mechanism) have to issue self-invoice. The
relevant portion of Section 9(3) of the CGST Act, 2017 is reproduced as under :
“9(3) The Government may, on the recommendations of the Council, by no-
tification, specify the categories of supply of goods or services or both, the tax
on which shall be paid on reverse charge basis by the recipient of such goods
or services or both and all the provisions of this Act shall apply to such recip-
ient as if he is the person liable for paying the tax in relation to the supply of
such goods or services or both.”
The above provision has been notified vide Notification No. 13/2017-C.T., dated
28-6-2017 as amended.
With regard to reverse charge means a registered person or recipient of
goods or services or both have to pay tax in place of supplier. Section 2(98) de-
fines “reverse charge “means the liability to pay tax by the recipient of supply of
goods or services or both instead of the supplier of such goods or services or both
under sub-section (3) or sub-section (4) of Section 9, or under sub-section (3) or
sub-section (4) of Section 5 of the Integrated Goods and Services Tax Act;”
A combined study of these provisions Section 31(3)(f) and Rule 36(1)(b)
makes it clear that the liability to pay GST under reverse charge lies on recipient
of the goods or services, such a recipient does not become the supplier of such
goods or services, though, such recipient would become the person liable to pay
tax under Section 9(3).
Therefore, the recipient who is required to pay GST under reverse charge
and have to raise self-invoice under Rule 36(1)(b) cannot be treated as the suppli-
er of such goods or services, despite that such recipient become liable to pay GST
under RCM, i.e., Section 9(3) of the CGST Act, 2017.
Hence, the time-limit prescribed for availing ITC under Section 16(4)
would not apply to the GST paid by the recipient of the goods or services under
reverse charge mechanism and wherein the recipient have to avail ITC on the
strength of Self-invoice under Section 31(3)(f) of the CGST Act, 2017 and read
with Rule 36(1)(b) of the CGST Rule, 2017. It is to be mentioned that restriction of
time-limit is applicable only invoice issued by the supplier “for the supply” of
goods or services under Section 31(a) of the CGST Act, 2017 whereas the self-
invoice prepared by the recipient under Section 31(3)(f) of the CGST Act, 2017 for
discharging the tax liability under RCM [under Section 9(3)] is an invoice pre-
pared “for the receipt” of goods or services. It is to be contended that the re-
striction contained under Section 16(4) of the CGST Act, 2017 even if applied
would apply only qua the year in which the self-invoice is prepared and not qua
the year in which the underlying supplies would have been received.
Further, Rule 36(1)(d) a bill of entry is one of the similar documents pre-
scribed under the Customs Act, 1962 or rules made thereunder for the assess-
ment of integrated tax on imports. Thus, the time limit of prescribed for availing
ITC under Section 16(4) do not apply to the IGST paid by the importer of goods
as the Bill of entry is not document prescribed under Section 16(4) and Bill of en-
try is filed by the importer for the payment of IGST and Bill of entry is not sup-
plier document.
Hence, the time-limit as provided under Section 16(4) of the CGST Act,
2017 do not apply to bill of entry or for imported goods. Thus, the restriction of
time limit under Section 16(4) do not apply to ITC of IGST paid on import of
GST LAW TIMES  18th June 2020  39