<p><span>The Ministry of Finance's Circular No. 211/5/2024-GST, issued on June 26, 2024, provides crucial clarification on the time limit under Section 16(4) of the CGST Act, 2017, concerning the Reverse Charge Mechanism (RCM) supplies received from unregistered persons. Below are the key highlights:</span></p><ol start="1"><li><span><strong>Time Limit for Availment of ITC</strong>: The Circular clarifies that the relevant financial year for the time limit to avail Input Tax Credit (ITC) under Section 16(4) is the financial year in which the recipient issues the invoice for RCM supplies received from unregistered suppliers.</span></li><li><span><strong>Conditions for Availing ITC</strong>: ITC can only be availed if the recipient is in possession of a tax invoice or debit note issued by the registered supplier, or other prescribed tax-paying documents. For RCM supplies, the recipient must issue an invoice and pay the tax in cash.</span></li><li><span><strong>Interest and Penal Action for Delayed Payment</strong>: If the recipient issues the invoice after the time of supply and pays tax accordingly, they must pay interest on the delayed payment of tax. Additionally, delayed issuance of the invoice may attract penal action under Section 122 of the CGST Act.</span></li><li><span><strong>Uniform Implementation</strong>: The Board has directed suitable trade notices to be issued for publicizing the contents of the Circular to ensure uniformity across field formations. Any implementation difficulties should be reported to the Board for resolution.</span> <a href="https://cms.plasament.com/storage/shubham-pathak/circular-no-211-05-2024.pdf">circular-no-211-05-2024</a><br><br> </li></ol>