REMIDIES IF GTA HAS FOLLOWED FCM AND RCM IN THE SAME PERIOD

[CHVN KUMAR]

HI every one

Please provide your valuable opinion for the following

1. GTA has followed the same methods for invoice raising i.e., FCM and RCM in the same period.

2. Department has any right to convert entire turnover into taxable i.e, FCM

Is there any directon / provision there in the Act in this regard?

What are the remidies available for GTA in this regard

[KASTURI SETHI]

There is no remedy to this lapse. I have already replied on this issue in this forum a few months back. Filing an option for FCM is requirement of GST law. The Board has already issued clarification in the form of FAQ on this issue. Now the SCN will be issued for imposition of penalty. Differential amount of tax along with interest will also be demanded. The department has statutory power to treat the whole taxable value under FCM. Issuance of an invoice under FCM is itself an option for FCM for the financial year. Invoice is also a sort of contract.

[YAGAY andSUN]

Priciple of unjust enrichment may apply. However in recent judgment refund cannot be filed even service tax is paid inadvertently.

[KASTURI SETHI]

Rightly advised by M/s.Yagay and Sun, Sirs. Thanks & regards for offering your views on the issue. Now the picture on the issue is very much clear. It is beyond doubt that the party can not adopt hybrid procedure.

[YAGAY andSUN]

If any hybrid system is adopted then, Government will assume the tax paid on higher side was liable to be paid and any short paid tax will collected by issuance of SCN.

[KASTURI SETHI]

Dear Sir,

I am also of the same view.

AI Summary

GST Law Requires Clear Choice Between FCM and RCM; Hybrid Invoicing Not Allowed, Potential Penalties Possible A discussion on a forum addresses the issue of a Goods Transport Agency (GTA) using both Forward Charge Mechanism (FCM) and Reverse Charge Mechanism (RCM) for invoicing within the same period. The forum participants agree that there is no remedy for this lapse, as the GST law requires a clear choice between FCM and RCM. The tax department has the authority to treat the entire taxable turnover under FCM, and a Show Cause Notice (SCN) may be issued for penalties and tax differentials. The principle of unjust enrichment may apply, but recent judgments suggest refunds are not possible if service tax is paid inadvertently. Hybrid procedures are not permissible.