Rcm on freight

[Guest]

Dear sir i have one doubt regarding RCM on frieght.as per Gst notification no.12/2017 -central tax(rate) dated 28/6/2017 (sr.no 18) transporters has two options to pay GST 5%with out input.12% with input.and it further shows that if transporter chooses 12% as per notification the specified supplier need not pay gst on RCM.it means if he chooses 5% then supplier is also required to pay under RCM.please send me reply

[rajkumar shukla]

pl confirm whether it is notfn 11/2017 or 12/2017

[Rajagopalan Ranganathan]

Sir,

Sl. No. 1 of Notification No. 13/2017- Central Tax (Rate) dated 28.06.2017 as amended clearly says if the Goods Transporter opts for payment of gst @6% with eligibility to avail ITC of gst paid on inputs and input services, then payment of gst under RCM by the receiver of the service does not arise.

If the transporter is not paying gst on the service provided by him to the entities listed against Sl. No. 1 of the above Notification then the entities listed have to pay gst on GTA service received by them under RCM @ 5% since the entities cannot avail ITC of gst paid on inputs and input services availed by the transporter.

[Alkesh Jani]

Sir, In simple language it can be said that If you are getting invoice of 12% from GTA, then you are not required to pay under RCM and if you are getting invoice then you are required to pay 5% under RCM

[Guest]

@@Rajagopalan Ranganathan

Dear sir,

As per notification

If GTA opts to pay 5% on output then input is not availabletosuch GTA.And the notification also says if GTA chooses 12% on output the specified suppliers are not required to pay GST under RCM as u have said but the notification is silent about if GTA chooses 5% on output then whether the specified supplier are required to pay GST under RCM or not?

[Ganeshan Kalyani]

if transporter charges GST on invoice either 5% or 12% then the recipient (which you have mentioned as supplier ) need not pay GST under reverse charge.

if transporter does not charge any tax on invoice then the specified recipient is liable to pay GST under reverse charge .

Further, the option of 5% or 12% is provided to the transporter. If he claims input tax credit then will have to pay tax @12% and if he doesn't then 5%.

[KASTURI SETHI]

The reply of Sh.Ranganathan Sir is very much clear. What I infer from all the replies, first liability is of GTA (Transportet), thereafter consignor or consignee.

[Ganeshan Kalyani]

I agree with Sri Kasturi Sir's view .

[Kusalava InternationalLimited]

Sir,

Can I Claim ITC 12% Invoice raised by transporter.

[rajkumar shukla]

In my view ,the restrictions imposed for availing ITC is for GTA and not for recipient. Recipient is eligible for ITC so long as GTA services are input for them.

[KASTURI SETHI]

Yes, Sir. I agree with you.

[JAIPRAKASH RUIA]

In case of recipient is paying the GST under RCM @5%, recipient should take the declaration on LR/Bill from the transporter that he is not taking the credit of GST on input/CG/input service availed by him, if transporter is registered and if transporter is unregistered there no question of taking the credit of GST by him.

AI Summary

Reverse charge on freight: recipient pays only when transporter does not charge GST; charging GST on invoice removes reverse charge duty. Reverse charge on goods transport services depends on whether the transporter charges GST and which tax option the transporter elects: if the GTA charges GST on the invoice (either lower non ITC option or higher ITC option), the recipient need not pay under reverse charge; if the transporter does not charge GST on the invoice, the recipient is liable to pay GST under reverse charge. Recipients may claim input tax credit for GTA services where they qualify, and should seek a declaration from the transporter about claiming input credits when reverse charge is paid.