Advisory on Filing of Declaration in Annexure V by GTA: Key Guidelines

Goods and services Tax (GST) network recently issued advice, where Good Transport Agencies (GTAS) submitted an announcement on the GST portal (Annex V) to choose the ability to pay taxes under the cost mechanism. This article recommends GTA on the submission of the announcement in Appendix V, used GST prices and the process of archiving the attachment V for GTAs for further claims.

Forward and reverse charging mechanism for GTA

Pursuant to the GST Act, a goods transport agency (GTA) is defined as any unit, and provides transport services for goods via road when issuing a consignment note or similar documents. GTAs can choose to collect and pay GST under a further charging mechanism. If they do not choose this option, the responsibility for paying the GST shift to the recipient is under the reverse charging mechanism (RCM). Both options are available to the GTA in accordance with the GST law, but the GST portal has recently enabled the process to choose forward charging through Appendix V. It corresponds to July 13, 2022 with an alert number 03/2022-Central tax (interest).

Compliance by a GTA under the Forward Charge Mechanism

A new update on the GST portal states that GTAs opting to pay GST on the services they provide under the forward charge mechanism must file Annexure V on the GST portal. Below is the process for filing Annexure-V.

Deadline for Filing Annexure-V

To opt for the forward charge mechanism for the next financial year, GTAs must submit Annexure V on the GST portal by 31st March of the preceding financial year. Previously, the deadline was 15th March, but it was extended following the 50th GST Council meeting on 11th July 2023. For instance, for FY 2023-24, the deadline to opt for a forward charge was 31st March 2023. The CBIC also extended the filing deadline for FY 2023-24 to 31st May 2023. Additionally, new taxpayers crossing the registration threshold in FY 2023-24 can file Annexure V within 45 days of GST registration or one month from the date of receiving the registration certificate, whichever is later. Once filed, the decision to opt for the forward charge cannot be revoked during the financial year. This means a GTA that opts into forward charge must continue with it for the entire year without switching to RCM midway.

Step-by-Step Process to File Annexure V on GST Portal

To opt for a forward charge, GTAs must follow these steps:

1. Log in to the GST portal.

2. Navigate to ‘Services’ → ‘User Services’ → ‘Opting Forward Charge Payment by GTA (Annexure V).’

3. A confirmation box appears. Click ‘Proceed’ for gta in gst

4. Select the financial year and click ‘Go.’

5. Select the checkboxes for both declarations and click ‘Proceed to file’ to submit Annexure V.

6. GTAs opting for forward charge must upload a legible copy of the duly acknowledged Annexure V using the manual upload feature. This can be accessed on the GST FO portal → Services → User Services → GTA → Upload Manually Filed Annexure V.

7. GTA services in GST

8. GTAs opting for forward charge can choose between two GST rates:

9. 5% GST without Input Tax Credit (ITC)

10. 12% GST with ITC

11. If a GTA does not opt for a forward charge, the recipient pays GST under RCM, and service receivers can avail of the Input Tax Credit (ITC) on the GST paid under RCM.

What is the Forward charge in GST?

1. Control over compliance – The GTA ensures timely GST payment, reducing customer compliance burden.

2. Better sales potential – Service recipients prefer vendors who handle GST themselves.

3. Flexibility in tax rates – GTAs can choose between 5% (without ITC) and 12% (with ITC) depending on business needs.

4. Avoidance of RCM complications – When vendors are non-compliant, opting for 5% GST removes ITC-related issues.

Conclusion

GTAs opting for forward charge must file Annexure V on the GST portal by 31st March of the preceding financial year. Once opted in, the decision remains in effect for the entire year. Forward charge benefits GTAs by offering control over compliance and sales advantages while allowing flexibility in choosing GST rates.

FAQs

1. What happens if Annexure V is not filed?

If a GTA fails to file Annexure V within the due date, it cannot opt for a forward charge in the next financial year and must continue with the existing tax mechanism.

2. What is the new rule in GTA GST?

GTAs can either pay 12% GST with ITC or 5% GST without ITC. They must opt for a forward charge at the start of the financial year.

3. What is the GST registration limit for GTAs?

GTAs must register under GST if their annual turnover exceeds Rs.20 lakhs (Rs.10 lakhs for special category states) unless their services exclusively fall under the Reverse Charge Mechanism (RCM). By following the correct process and filing Annexure V, GTAs can streamline their GST compliance and enhance their business operations.

Suggested Read: GST Filing: Returns, Types & Due Dates