ELIGILIBILITY OF ITC ON GST PAID ON GTA BY END USER @5 %

[Kailash Garg]

we are paying RCM on GTA services @ 5% on Raw materials and trading goods we are selling goods and paying GST @5% we are eligibile for ITC for GST paid on GTA ?.

[YAGAY andSUN]

Transporting goods (GST paid by GTA).

5% No ITC

or

12% with ITC

Please refer Notification No. 13/2017- Central Tax dated 28/06/2017 for payment undre RCM.

The following businesses/ recipient of services are required to pay GST under Reverse Charge Mechanism (RCM):-

Factory registered under the Factories Act,1948;

A society registered under the Societies Registration Act, 1860 or under any other law;

A co-operative society established under any law;

A GST registered person;

A body corporate established by or under any law; or

A partnership firm whether registered or not (including AOP)

Casual taxable person.

[YAGAY andSUN]

Transporting goods of 7 specified recipients as mentioned above, if GTA Charges 12%, GTA must deposit tax and ITC can be availed

Otherwise

if GTA Charges 5%, RCM applies and recipient must deposit tax and ITC cannot be availed

[Rajagopalan Ranganathan]

Sir,

In my opinion if GTA pays GST @5% he cannot avail ITC of tax paid on the input goods/services. However, if the recipient pays GST 5% under RCM, then the receiver of GTA service is eligible to avail ITC of GST paid under RCM.

[KASTURI SETHI]

In the scenario mentioned by the querist, ITC is admissible to the service receiver under RCM.

[Ganeshan Kalyani]

ITC is available to the recipient paying GST under RCM on GTA.

[Spudarjunan S]

You are eligible to avail the ITC on such RCM paid subject to that you are not restricted by section 17(2) of CGST Act, 2017. If so, you can still avail and the follow the procedures prescribed there in.

With regard to the condition attached to the entry "Services of goods transport agency (GTA) in relation to transportation of goods - 2.5% (5%)" in the notification no.11/2017 CT(R) dated 28.06.2017(as amended) -

Condition -

"Provided that credit of input tax charged on goods and services used in supplying the service has not been taken"

The credit restriction is only to those goods and services used in such supply. You have not used any goods or services for providing such service. Hence such restriction would apply only to the suppliers and not to the recipient. Hence you can avail your RCM credit as a recipient as discussed above.

AI Summary

Eligibility of Input Tax Credit on 5% GST for Goods Transport Services under RCM clarified; check Section 17(2) conditions. A query was raised about the eligibility of Input Tax Credit (ITC) on Goods and Services Tax (GST) paid under the Reverse Charge Mechanism (RCM) for Goods Transport Agency (GTA) services at a 5% rate. Responses clarified that if the GTA charges 5% GST, the recipient must pay tax under RCM, and ITC cannot be availed. However, some replies indicated that the recipient paying GST under RCM is eligible for ITC, provided they are not restricted by section 17(2) of the CGST Act, 2017. The discussion referenced relevant notifications and conditions for availing ITC.