ITC on GTA

[Dinesh Biyanee]

In the rates of services of GTA it is written that 5% with no ITC. and 12% with ITC if on forward charge

can we avail credit if it is 5% on RCM

[Himansu Sekhar]

You can get the ITC, but the itc on the inputs, capital goods, input services used for providing the GTA services is not allowable. This is the meaning of the phrase ,'with no ITC'

[THYAGARAJAN KALYANASUNDARAM]

Dear sir,

As per sec 9(3) of CGST act, it is mandatory to pay the tax on GTA only by the recipient in case of registered person under GST act. Then how do we define GTA @ 5%/12% and the tax @12% discharge by the recipient, is the provider can claim the input tax credit.

Here I have confusion on input tax credit, anyway tax is going to be paid by recipient only either 5%/12%(if the recipient is registered). That means gta service provider simply say pay @12% and he will get the entire inputs?

Thanks in advance.

[RAMESH PRAJAPATI]

If the transporter declares that the credit of input tax charged on goods and services used in supplying the service has not been taken, GST rate on GTA is 5% otherwise 18%. ITC of GST paid under RCM by recipient is available if the service is used in course of taxable business.

[KASTURI SETHI]

Both experts have made the position crystal clear. I support views of both experts.

AI Summary

Input tax credit availability for GTA services follows recipient reverse-charge payment and supplier declaration on credit usage. Tax on Goods Transport Agency services is payable by the registered recipient under the reverse charge mechanism; suppliers may publish a lower rate described as 'with no ITC' only if they declare they have not availed credit on inputs, input services or capital goods used to provide the service. If the supplier has availed input tax credit, a higher rate applies. A recipient who pays GST under reverse charge may claim input tax credit for that GST to the extent the GTA service is used for taxable business.