Option for GTA Services in GST

[JIGAR SHAH]

Our client providing GTA services. In current GTA service provider have three option to charge GST. 1.) Reverse Charge 2.) @5% without ITC & 3.) @12% with ITC. Can we excise both option 1 & 3 parallel(i.e partly sales with reverse charge & partly sales @ 12% with ITC).

[KASTURI SETHI]

Not at all. Either opt for FCM or RCM. If your client opts for FCM, he will have to supply service under FCM for the whole financial year. Option can be exercised at the start of new financial year. No hybrid procedure is allowed.

[Ravikumar muthusamy]

In my opinion GTA can collect GST if recipient is other than notified persons @5% without ITC or 12% with ITC . this option to be exercised once in a FY. if the recipient is notified person then GTA need not collect GST as it is to be paid by notified person under RCM.

pls correct me if i am wrong

[Ganeshan Kalyani]

It will invite audit query as there will be irregularity in tax payment. That is some transaction will be considered for RCM and dome for FMC . Department cannot audit it. You will also not be able to justify all the transaction. Even if transaction is let out to be considered for RCM then you will lose the trust of the auditor. Hence it is always better to follow one method as opined by experts colleague.

[JIGAR SHAH]

Thank You Kasturiji, Ravikumarji and Ganeshanji for your valuable advise.

[Ganeshan Kalyani]

You are welcome Sir. Thanks.

[Ravikumar muthusamy]

I think GTA can raise both FCM and RCM invoices as RCM is applicable if service recipient is notified persons . Even security agency service providers also raise both FCM and RCM invoices

pls confirm the above correct or not

[KASTURI SETHI]

Dear Ravi Kumar Ji,

I am not closed. You should post your query independently so that you should get the views of all experts. Also explain with example how hybrid procedure (method) is applicable to Security Service.

[KASTURI SETHI]

No hybrid procedure. See Notification No.20/17-CT(Rate) dated 22.8.17 Serial No.(iii) amending Notification No.11/17-CT(Rate) dated 28.6.97 substituted the following language against serial 9 :-

CGST 6 % +6% SGST

Provided that the goods transport agency opting to pay central tax @ 6% under this entry shall, thenceforth (meaning in future) , be liable to pay central tax @ 6% on all the services of GTA supplied by it.”;

[Ravikumar muthusamy]

Very kind of you sir. I am clear now

AI Summary

GTA taxation option: provider must elect either forward-charge or reverse-charge for an entire financial year. GTA services must be taxed under either a forward charge or reverse charge regime; the provider must elect the forward-charge option at the start of a financial year and apply it to all GTA supplies for that year, and parallel or hybrid application of both methods across transactions is not permitted. Reverse charge applies when the recipient is a notified person who is liable to pay tax.