Foreign company

[Rajagopalan Sundaram]

GTA provides services of transportation in India to a foreign company

My questions are

1) what is the rate of gst to be charged . Pls confirm my understanding it is IGST.As foreign company has no GSTiN , how do GTA proceed in this regard.

2) Trucks for the above job were hired from URD transporter, hence rcm is payable by GTA which is 5 % . Can GTA take ITC for the same

Thank you

[KASTURI SETHI]

Reply to Query No.1 : Transported goods are to be consumed in India. You are covered under Section 12(8)(b) of IGST ACT, 2017. Under Forward Charge Mechanism rate is 12% (6% + 6%).. You can take ITC if you pay 12%. You will have to opt for working under FCM in the beginning of Financial Year.

Reply to Query No.2 (Hiring Vehicle is exempted as per Notification given below:-

Notification No.12/17-Central Tax(Rate) dated 28.6.17

22	Heading 9966 or Heading 9973	Services by way of giving on hire - (a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or	Rate Nil	Condition Nil
		(b) to a goods transport agency, a means of transportation of goods.	NIL for (b) also

[Ganeshan Kalyani]

The Service of giving on hire of vehicle to goods transport agency is exempted.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Sethi.

[Rajagopalan Sundaram]

Dear Mr Sethi

Thank you very much.

As regards query no 1-. GTA has been charging on RCM and for FCM we hv to wait till next FY. In this case since GTA has already performed the services what will be the rate .

AI Summary

IGST on transport services applies under forward charge; input tax credit available if tax is paid; vehicle hires to GTA may be nil-rated.
Transport services supplied in India to a foreign company consumed in India fall under Section 12(8)(b) of the IGST framework and, if supplied under the forward charge mechanism, attract IGST at the applicable composite rate; the supplier can claim input tax credit when tax is paid under forward charge and the mechanism is adopted at the start of the financial year. Hire of vehicles to a goods transport agency is notified as exempt (nil-rated). When vehicles are hired from an unregistered transporter, reverse charge liability may arise on that procurement.