Can Unpaid GST under RCM from 2017–18 to Oct 2024 be Paid in 2024–25 with ITC?

The Reverse Charge Mechanism (RCM) under GST imposes tax liability on the recipient of specified goods and services. Many taxpayers, especially small and medium businesses, failed to pay RCM tax in the early years of GST (2017–18 to 2020–21) due to transition issues, lack of awareness, system errors, and misinterpretation of rules. As businesses later realized these lapses, a common question surfaced: Can unpaid RCM GST of past years be paid now (in FY 2024–25), and can ITC be claimed on such late RCM payments?
This thesis provides a complete legal, practical, and compliance-oriented analysis.

RCM liability arises at the time of receipt of goods or services, and GST must be paid in cash through the electronic cash ledger. Unlike forward charge, where the supplier pays GST, RCM is self-payable by the recipient. Once the RCM tax is paid, the taxpayer becomes eligible to avail Input Tax Credit (ITC)—provided conditions are satisfied.
Thus, RCM liability is independent of return filing timelines and remains payable until discharged.

Yes.
RCM liability does not expire. If a taxpayer has missed paying RCM for any period from 2017–18 to October 2024, they can still pay it in FY 2024–25. The system allows payment because GST law does not restrict delayed payment of RCM.
However, interest becomes applicable for the delayed period. The taxpayer must discharge interest before claiming ITC.

Yes, ITC can be availed even if RCM is paid late, but only after satisfying all conditions under Section 16 of the CGST Act.
If RCM is paid in FY 2024–25, ITC can be availed in the GSTR-3B of the same financial year.
There is no time limit for availing ITC on RCM tax because:

RCM ITC is self-generated credit.

It is not dependent on supplier’s invoice upload.

It is not part of GSTR-2A/2B match process.

The time limit under Section 16(4) does not apply to RCM ITC.

Thus, even if RCM pertains to earlier periods, ITC can still be availed after payment.

Section 16(4) restricts ITC claim based on tax invoices issued by a supplier.
In RCM:

The supplier issues no tax invoice with GST.

The recipient issues a self-invoice.

ITC flows from RCM tax paid, not from supplier invoice.

Hence, ITC eligibility for RCM remains open indefinitely.
Therefore, taxpayers can avail ITC after paying old RCM, irrespective of the financial year.

To validly claim ITC on late RCM payments in FY 2024–25, the taxpayer must meet the four conditions of Section 16(2):

a. Possession of Self-Invoice Under RCM

A self-invoice must be available for the period for which RCM applies. If missing, it must be prepared now.

b. Receipt of Goods / Services

Goods or services must have actually been received.

c. GST Paid Under RCM

GST must be paid in cash in FY 2024–25.

d. Return Filed

GSTR-3B must be filed reflecting RCM liability and ITC.

If these four conditions are met, ITC is allowable irrespective of year.

Non-payment of RCM for previous periods leads to:

Accumulated interest liability

Risk of departmental notices

Potential loss of ITC until payment

Possible audit objections

Exposure under Section 73 or 74 proceedings

Paying dues now reduces long-term risks and aligns records for compliance.

The taxpayer should follow these steps:

Step 1: Identify all missed RCM supplies from 2017–18 to Oct 2024

Using purchase data, expense ledgers, trial balance, etc.

Step 2: Prepare missing Self-Invoices

If not prepared originally.

Step 3: Calculate RCM liability + interest

Interest @18% must be calculated until date of payment.

Step 4: Pay RCM in FY 2024–25 (in cash)

Step 5: Claim ITC in the same month’s GSTR-3B

ITC is eligible immediately after paying RCM.

Step 6: Maintain documentation

For future audits.

Legally, no, because:

RCM ITC is not subject to Section 16(4).

It is self-invoiced and self-paid.

ITC is linked to payment of tax, not financial year.

Courts have consistently allowed such ITC (though we are not citing references as per your instruction).

Department can object only if:

Self-invoice is missing

Receipt of service is unproven

RCM tax is not paid fully

ITC is claimed without proper documentation

If documentation is proper, ITC cannot be denied.

Risk: High interest liability

Mitigation: Pay earlier to reduce burden.

Risk: Audit objections

Mitigation: Maintain robust documentation.

Risk: Lack of self-invoices from earlier years

Mitigation: Issue self-invoices now and keep supporting evidence.

Risk: Supplies may no longer be considered RCM

Mitigation: Check historical notifications.

If interest and penalty are waived under any amnesty schemes, taxpayers may reduce financial burden significantly.
However, principal tax under RCM must always be paid in cash, after which ITC becomes available.

Yes, unpaid GST under RCM for past periods (2017–18 to Oct 2024) can be paid in FY 2024–25, and after payment, Input Tax Credit can be availed fully in FY 2024–25 returns.
RCM liability does not lapse, and ITC on RCM is not restricted by time limits under Section 16(4).
Once RCM tax is paid and documentation is proper, ITC becomes legally permissible.
Businesses should identify old RCM lapses, pay dues voluntarily, claim ITC, and avoid future litigation.