QUICK SUMMARY
In respect of GTA, the liability to pay GST falls on the recipients under reverse charge in most cases. However, the GTA may opt to pay under forward charge.
If the GTA opts forward charge, a 12% GST may allow for claim of ITC, and opting for lower rate (i.e. 5% GST) may not allow ITC claim.
UNDERSTANDING APPLICABILITY OF RCM ON GTA
Meaning of GTA: Goods Transport Agency (GTA) being any person who provides service in relation to transport of goods by road and issues consignment note.
Applicable Section: Section 9(3) of the CGST Act
Service Covered under RCM:
- Goods Transport Agency (GTA) by road
- who has not paid Central Tax @6% (i.e. who has opted for GTA rate applicable of less than 12% on its output service)
- to Specified Recipients (listed below)
Includes Allied Services: GTA service includes other ancillary services such as loading, unloading, packing, trans-shipment, temporary warehousing, etc. if provided as part of transportation.
Recipient of Service for RCM Applicability:
(a) any factory registered under or governed by the Factories Act, 1948
(b) any society registered under the Societies Registration Act, 1860
(c) any co-operative society established by or under any law
(d) any person registered under GST
(e) any body-corporate established by or under any law
(f) any partnership firm or AOP
(g) any casual taxable person
Excluded from RCM if Recipients are any of the following:
(a) a Department or Establishment of the Central Government or State Government or Union territory
(b) local authority
(c) Governmental agencies, which have taken registration under GST only for the purpose of deducting TDS and not for making a taxable supply of goods or services.
Invoicing by GTA in case of RCM: Issue tax invoice specifying that the tax is payable on reverse charge basis by the recipient
ITC Under RCM: The supplier shall not be eligible to claim input tax credit of GST paid on goods or services used to make supplies on which the recipient is liable to pay tax.
GST Return Filing: Invoice-wise details of such supplies covered under RCM shall be reflected in Table 4B of Form GSTR-1, and in Table 5C of GSTR-9.
OPTION TO CHARGE GST
If the GTA is a company registered under GST, it has the following options to pay GST, which shall remain uniform for the entire financial year.
1) 12% GST with claim of ITC
2) 5% GST with no claim of ITC
If the GTA chooses the option other than 12%, it may get covered under RCM and would not be allowed to claim ITC.
