FCM and RCM under GST

[Guest]

A GTA service provider can opt for RCM in case of FCM anytime ? or there is some requirement by law.

can he change his mechanism anytime ?

[ANITA BHADRA]

In my view , option for RCM / FCM by GTA service provider is transaction based and not for specific period .

No such requirement has been indicated in any notification / provisions under GST Act .

Experts are requested to share their views

[KASTURI SETHI]

After browsing so many notifications/circulars/FAQs etc. I am also of the same view.

[Himansu Sekhar]

When the supply is to the non specified category, suppose to an individual like us, then there will be FCM

Else RCM

He cannot change it as per his wish. He will pay as per the theory prescribed under law/

[ANITA BHADRA]

As per notification No 20 / 2017-Central Tax (Rate) 22nd August 2017, GTA has to opteither of the below options as discussed earlier:

12% GST with ITC (Forward Charge), or

5% GST with no ITC (Reverse Charge)

[Ganeshan Kalyani]

In my view there should be consistent method being followed to pay tax by a taxable person. So ideally it would be for a period and not on a transaction to transaction basis. Otherwise it will become difficult for an audit to check the accounts .

[Guest]

From when I can shift to FCM from RCM ? Client has supplied under both mechanism. How to correct his transactions ?

[Ganeshan Kalyani]

Logically from the beginning of a month or beginning of a year.

[Ravikumar muthusamy]

If GST collected by GTA in his bill then no need for GST payable by receipient under RCM.

Experts pls correct me if wrong

[KASTURI SETHI]

This is an extract from 20th GST Council Meeting on 5.8.17

8.

Goods Transport Agency Service (GTA)

Allowed option of 12% GST with full ITC under forward charge. 5% GST with no ITC will also continue. (However, the GTA has to give an option at the beginning of financial year

[Ganeshan Kalyani]

Yes, correct

AI Summary

Can Goods Transport Agencies Switch GST Charge Mechanisms? Transaction-Based Choice Between FCM and RCM Explained. A discussion on a forum addresses whether a Goods Transport Agency (GTA) service provider can switch between Forward Charge Mechanism (FCM) and Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST). Participants agree that the choice is transaction-based, not period-based, and governed by legal provisions. A GTA can choose between 12% GST with Input Tax Credit (ITC) under FCM or 5% GST without ITC under RCM. The consensus is that the method should ideally be consistent over a period for audit purposes. Changes should be made at the beginning of a month or year.