gst rate for gta and itc credit eligibility

[Ramakrishnan Seshadri]

Dear Sir,

We are manufacturers of automobile parts. We use to hire transport agencies to transport our goods to our customer.

The transport agency is also registered with the gst and having a valid gstin.

Now our question, the transport agency is issuing invoice charging gst of 5%.. In another case the gta is charging cgst 6%+sgst 6%.

Could you please confirm credit is eligible on this

Thanks & Regards

S.Ramakrishnan

[Rajagopalan Ranganathan]

Sir,

In both cases the recipient of the service is eligible to avail ITC of gst paid by the supplier of the service. Where the supplier of the service is paying 5% gst the supplier is not eligible to avail ITC of tax paid on inputs and input services availed by the supplier. There is no restriction for availing ITC by the recipient.

[Himansu Sekhar]

at the customers end, there is no restriction for taking the credit. You can take the credit.

[KASTURI SETHI]

I support the views of both experts.

AI Summary

Input tax credit eligibility: recipient may claim ITC even when a goods transporter applies a concessional GST rate.
The recipient of goods transport agency services is entitled to claim input tax credit on GST charged by the transporter whether the transporter applies a concessional single-rate or separate central and state GST components; a transporter who applies the concessional rate may be ineligible to claim ITC on its own inputs, but that supplier ineligibility does not restrict the recipient from availing credit.