GST Input Credit

[Ethirajan Parthasarathy]

A goods transporter has charged ₹ 600/- for transport of goods & has also issued consignment note. Though the amount charged is below 750/- (threshold limit prescribed), the registered person pays tax under RCM. Is he eligible to take input credit.

[KASTURI SETHI]

Yes. He is eligible to avail ITC under RCM.

[Ganeshan Kalyani]

Yes, input tax credit is allowed on GTA.

[Ethirajan Parthasarathy]

I am thankful to the response by the experts. I regret a mistake has crept in my query which has altered the very concept. My query is about ITC on freight charges (which is not supported by consignment note) paid under RCM. Please see my rephrased query :

A goods transporter has charged ₹ 600/- for transport of goods & has not issued consignment note. Though the amount charged is below 750/- (threshold limit prescribed), the registered person pays tax under RCM. Is he eligible to take input credit.

[PAWAN KUMAR]

Dear Sir,

As per my view, since goods transporter has not issued consignment notes and as per definition under the gst law, it is not under GTA hence not liable for GST under RCM.

Secondly if any case it cover under GTA, then, gross amount charged for consignment is under ₹ 750, hence it is exempt.

in both the cases above, as per my view, GST will not payable.

[KASTURI SETHI]

With the rephrasing of query, the whole scenario has changed. I support the views of Sh.Pawan Kumar Ji.

[SIVARAMA KUMAR]

Only a registered dealer is eligible to claim ITC on RCM. if used for his taxable business or furtherance of business activity.The threshold limit of 750 per consignee is exempted only in the hands of the supplier of service,which you were not aware. The provisions of the act casts the liability to pay tax under RCM for the recipient of service ,and no provisions restrict claim of ITC paid under RCM paid on exempted supplies.

My view is that you would still be eligible to claim ITC.,

[Ganeshan Kalyani]

To claim ITC the outward supply should be taxable. RCM paid on GTA should be toward taxable supply I.e. supply of taxable goods.

AI Summary

No Input Tax Credit for Transport Services Without Consignment Note Under GST; Exempt from Goods Transport Agency Classification. A discussion on a forum addressed a query regarding the eligibility to claim Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime when a goods transporter charges below the threshold limit of 750 and no consignment note is issued. Initially, responses affirmed ITC eligibility under the Reverse Charge Mechanism (RCM). However, upon rephrasing the query to clarify the absence of a consignment note, it was concluded that without a consignment note, the transport service does not qualify as Goods Transport Agency (GTA) under GST, thus making the transaction exempt from GST and ineligible for ITC.