GTA services under forward charge mechanism

[SUSHILKUMAR GOYAL]

GST @ 6% on GTA services is allowed to be paid on forward charge basis provided that the goods transport
agency opting to pay central tax @ 6% under this entry shall, thenceforth, be liable to pay central tax @ 6% on all the services of GTA supplied by it.

I have a query - Is a person registered under two States can opt for paying GST on GTA Services on reverse charge basis, if it has opted for payment of tax on forward charge basis in one State?

[Rajagopalan Ranganathan]

Sir,

In my opinion if GTA pays 6% gst from one state then he has to follow the same procedure in respect of his unit in other state. He cannot pay 6% with ITC from one state and cannot supply GTS service from another state under reverse charge mechanism.

[SUSHILKUMAR GOYAL]

Thanks a lot!

[Ganeshan Kalyani]

I am totally in agreement with Sr Rajagopalan Sir's view. thanks

[rajkumar shukla]

Notification 11/2017 CT stipulates that

"Provided that goods transport agency opting to pay central tax @6%under this entry shall thenceforth be liable to pay central tax @6%on all the services of GTA supplied by it. It may also mean that against a particular registration in a particular state it may not be permitted to switch over between 5% and 12%..No other condition is appearing in this notification.

[SUSHILKUMAR GOYAL]

But relevant notification refers to Goods Transport Agency, which is defined as a person engaged in such rendering service. A person has been defined in CGST Act, 2017 as a Company, Firm, etc. No is no mention of Registered Person in the said provisions. A registered person is defined in CGST Act, 2017 as a person registered is a State. Therefore, in my view also a person being a Company or a firm can not opt for paying tax on reverse charge basis in a State, if it opts for paying tax on forward charge basis is another state. However, this view is subject to discussion and therefore further views are invited on this issue.

[rajkumar shukla]

I have already shared my views on this. Let others come forward.

Payment of tax in gst is qua registered person and registered person seeks state wise registration .Payment of tax is according to condition stipulated in the notification . Nothing can be imported into the notification which is not there.hence it has to be according to language of notification.

AI Summary

GTA forward charge option requires consistent application across registrations; cannot adopt reverse charge in another state.
Notification 11/2017 provides that a Goods Transport Agency opting to pay central tax at the prescribed rate "shall thenceforth be liable to pay central tax at that rate on all the services of GTA supplied by it," prompting debate whether this requirement binds the entire legal person across state registrations or applies separately to each state-wise registered person, with practitioners largely viewing the option as requiring consistent application across units.