Explain Input Tax Credit under Reverse Charge Mechanism

A supplier is not permitted to claim an ITC for GST paid via the RCM. When receiving goods or services, only those that are being used or will be used for business purposes are eligible for ITCs on the GST amount paid under RCM.

As per the law, the receiver must pay only in cash and is not allowed to use the ITC to pay the output GST.

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