Goods Transport Agency under GST with RCM Perspective

Under GST, the services of a Goods Transport Agency (GTA) are taxable under Reverse Charge Mechanism (RCM). RCM means that the liability to pay tax on a particular transaction is on the recipient of goods or services instead of the supplier.

A GTA is a person who provides services in relation to transportation of goods by road and issues a consignment note, by whatever name called. The consignment note is a document that contains details of the goods being transported and other information such as the name of the consignor, consignee, and the place of delivery.

When a registered person hires a GTA for the transportation of goods, the GTA is liable to pay GST on the transportation services provided. However, the recipient of the transportation service (i.e., the registered person who hired the GTA) is required to pay GST under RCM. The recipient can then claim Input Tax Credit (ITC) for the GST paid under RCM.

The rate of GST applicable on GTA services is 5% (CGST 2.5% + SGST 2.5%) or 12% (CGST 6% + SGST 6%) depending on whether the GTA has opted for input tax credit or not. If the GTA has not opted for input tax credit, the applicable GST rate is 5%, and if the GTA has opted for input tax credit, the applicable GST rate is 12%.

It is important to note that the RCM on GTA services is not applicable if the transportation services are provided by a non-registered person or an unregistered GTA. In such cases, the liability to pay GST would be on the supplier of transportation services, and the recipient would not be required to pay GST under RCM.

Additionally, there are certain exemptions available for GTA services. For example, GTA services provided for the transportation of agricultural produce, relief materials, and defense equipment are exempt from GST.

Here are some additional points related to GTA and RCM under GST:

1. The GTA services are taxable only when the GTA issues a consignment note. If a consignment note is not issued, the transportation services provided by the GTA will not be taxable under GST.

2. If a registered person is engaged in the business of GTA services, they are required to obtain registration under GST, regardless of their turnover.

3. If the GTA is registered under GST, they are required to charge GST on the services provided and file regular returns. If the GTA is not registered under GST, the liability to pay GST would be on the recipient of the transportation services.

4. The recipient of GTA services is required to pay GST under RCM even if the goods being transported are exempt from GST or if the recipient is engaged in the business of exempt supplies.

5. If the transportation services are provided by a GTA as a composite supply along with other services such as packing and loading, the rate of GST applicable on the entire supply would be the rate applicable on the principal supply, which in this case would be transportation services.

6. If the recipient of GTA services is eligible for composition scheme under GST, they are required to pay GST under RCM at a reduced rate of 0.5% (CGST 0.25% + SGST 0.25%) on the total value of supplies received from an unregistered GTA.

7. The recipient of GTA services is required to issue a tax invoice for the services received and include the GST paid under RCM in their GST returns. They can claim ITC for the GST paid under RCM, which can be used to offset their output tax liability.

FAQs

Here are some frequently asked questions related to Goods Transport Agency (GTA) under GST with RCM perspective:

Q: What is Goods Transport Agency (GTA) under GST?

A: Goods Transport Agency (GTA) refers to any person who provides services in relation to the transportation of goods by road and issues a consignment note, which is a document that contains details of the goods being transported and is used as proof of acceptance of the goods for transportation.

Q: Who is liable to pay GST on GTA services under RCM?

A: The liability to pay GST on GTA services under RCM (Reverse Charge Mechanism) falls on the recipient of the transportation services, who is a registered person under GST.

Q: What is the rate of GST applicable on GTA services under RCM?

A: The rate of GST applicable on GTA services under RCM is 5% (CGST 2.5% + SGST 2.5%).

Q: Is the recipient of GTA services required to obtain registration under GST?

A: The recipient of GTA services is not required to obtain registration under GST solely for the purpose of paying GST under RCM. However, if they are engaged in the business of providing taxable supplies, they are required to obtain registration under GST regardless of their turnover.

Q: Can the recipient of GTA services claim Input Tax Credit (ITC) for the GST paid under RCM?

A: Yes, the recipient of GTA services can claim ITC for the GST paid under RCM, which can be used to offset their output tax liability.

Q: What is the due date for payment of GST under RCM for GTA services?

A: The due date for payment of GST under RCM for GTA services is the 20th of the month following the month in which the services were received. However, if the recipient is an Input Service Distributor (ISD), the due date for payment of GST under RCM would be the 13th of the month.