RCM on Transportation charges paid of EXEMPT goods where no consignment note issued by Transporter

[ashok dalmia]

My client is trading in EXEMPT goods. The transportation charges are paid to TRANSPORTER directly and many a times to the GTA who is arranging the Trucks. But in all cases the TRANSPORT vehicle papers copy, PAN details of owner of truck, drivers driving licence . and declaration from owner of less than 10 trucks, is supplied to us by the GTA / transporter.

Would like to know, the Status of RCM paid on supply of those EXEMPT goods.??

whether leviable though no consignment note is given by GTA or TRANSPORTER and payment directly credited in either the GTA bank account for onward payment to transporter or else directly in the Truck owner account....

[KASTURI SETHI]

There are two points to be emphasized. First of all goods exempted from GST has no link GTA supply/ Service. Regarding the exemption from GTA service there is specific exemption on notified goods. Secondly, which is very crucia and relevant . to the effect that who, de facto, bears the expenses incurred for transportation by road.The factor of " who actually bears freight" will determine whether GTA is under RCM or Forward Charges Mechanism.

[ashok dalmia]

Thank you so much... Sir, for replying to my mail... on Taxability of GTA services.. under GST regime.

I think i could not present my point properly. My main emphasis was that CONSIGNMENT NOTE IS NOT ISSUED BY GTA SERVICE PROVIDER OR OWNER TRANSPORTER AND what would be the status of THOSE expenses booked.

Whether those will be treated as GTA services provided.

There are two ways in payment is made.

one the in account of GTA service provider amount is deposited for onward payment to truckowner... no consignment note or any document provided by GTA.. he only provides the vehicle ownership papers, pan number of vehicle owner and driver driving licence number etc.

second is direct deposit in account of vehicle owner.. and same documents..

The goods are exempt or taxable... does have materiality aspect in the sense... in one case we need to treat the RCM (if leviable as cost to person who pays the transportation charges) and in another case where the goods are taxable the RCM (if leviable) will have to be paid and then claimed as ITC,,

i think i am able to put this time the query more clearly... Sir, let me know your view... now on the matter..

In short there is an oral agreement between me and GTA or OWNER transporter on the basis of which i make payment in account of GTA or TRUCK owner and he does not provide me any documentary proof to me ... even while uploading the material into his truck or Downloading the material in the factory of my customer.

He carries my invoice and in present era Eway bill on road when he carries the material to my customer...

This trend is prevalent in West Bengal.. and the Transporter do not provide any BILTY or LR for material lifted from our factory and dumped at our customers end.

pl enlighten me taxability of those charges which i am paying...

[Ganeshan Kalyani]

If he does not gives you the paper for the goods transported then he is not responsible for the damages to the goods. By issuing consignment note the transported actually takes ownership of the goods being transported in his vehicle. There is an exemption in GST on GTA if the owner of the vehicle provides transportation service directly. If GTA is involved then gst is payable.

AI Summary

Is Reverse Charge Mechanism applicable on transport of exempt goods without a consignment note? GST implications explained. A client dealing in exempt goods is questioning the applicability of Reverse Charge Mechanism (RCM) on transportation charges when no consignment note is issued by the Goods Transport Agency (GTA) or transporter. The client pays transportation charges directly to the GTA or truck owner, who provides vehicle papers and driver details, but not a consignment note. Responses highlight that exempt goods have no direct link to GTA services, and the taxability depends on who bears the transportation cost. If the vehicle owner provides services directly, GST may be exempt, but if GTA is involved, GST is payable.