RCM on freight paid to individual transporter whose amount is less than 5000 a day?

[RameshBabu Kari]

RCM on freight paid to individual transporter whose amount is less than 5000 a day?

[Himansu Sekhar]

Yes gst is applicable even if the value is less than 5000 as the RCM is under sec 9(3). The 5000 scheme is foir sec 9(4).

[RAMESH PRAJAPATI]

I am agree with view of the expert but there is one another angle of this transaction also.

Sr. 18 of Notification No 12/2017-CT (Rate) exempts Services (HSN -9965) i.e. by way of transportation of goods by road except the services of a goods transportation agency and a courier agency. It means if the transportation service is not provided by GTA, then not taxable (goods transport agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called). So no need to pay GST on RCM basis for the services provided by individual vehicle owner who is not a GTA.

AI Summary

Reverse charge on freight may apply even for small daily payments, unless non GTA individual transporter services are exempt.
Reverse charge for freight payments applies despite low daily amounts when the supply falls under the reverse charge mechanism; however, transportation services provided by individual vehicle owners who do not qualify as Goods Transport Agencies may be exempt under the rate notification exclusion and thus not subject to reverse charge.