Goods Transport Agency

[VIGNESH]

Sir. Mr.A Registered as GTA and charging 18% tax on his invoice, and he owns 2 Lorry and he has hired another Lorry from Sister Concern and uses it for his Business, and he pay charges for the same. does payment to this hired lorry attracts RCM?

[Ganeshan Kalyani]

Sir, the rate of GST for GTA service is either 5% or 12%. The lorry taken on hire from sister concern falls under forward charge and the sister concern has to charge GST on the rent charged from you. RCM is not applicable.

[KUMAR Narasimhan]

Dear Sir,

Mr A no need to pay RCM.

Sister concern supplying Lorry to Mr A his exempt as per

Entry no 18 Heading 9965 Services by way of transportation of goods- (a) by road except the services of- (i) a goods transportation agency; (ii) a courier agency; (b) by inland waterways.

Experts this is my view.

[CA Hemanth Kumar]

Dear Sir,

Rate of tax applicable for GST will be

1. 5% - where recipiant will pay tax under RCM and ITC will not be available for GTA

2. 12%- Where GTA will pay tax under forward charge and no restriction on ITC.

Further, S.No.22 of notification No.12/2017 exempts Services by way of giving on hire – to a goods transport agency, a means of transportation of goods.

[Shilpi Jain]

Hiring of a vehicle is different from GTA. If the contract is that of hiring, no RCM will be applicable.

GTA is when a consignement note is issued. In this transaction if no consignment note is issued then it would not be a GTA and no RCM. Please check the contract for the terms to understand whether it is a hire arranngement or not.

[KASTURI SETHI]

In addition to above views of the experts, also see Heading 9966 at serial no.10(iii) of Notification No.11/17-CT(R) dated 28.6.17 as amended. Right to use of tangible goods. Terms and conditions of the agreement have to be taken care of.

[Shilpi Jain]

NO RCM PAYMENT, IF NO CONSIGNMENT NOTE BY GTA

CESTAT NEW DELHI

M/s. Bharat Swabhiman (Nyas) Versus CCCE, Dheradun - 2022 (1) TMI 1127 - CESTAT NEW DELHI

JUDGMENT

The department was of the view that by virtue of payment of freight charges, is a person liable to pay service tax and the freight amount is liable to Service Tax under “transport of goods by road service.’

The ‘Goods transport agency’ service has been defined in section 65(26) of the Finance Act to mean any person who provides service in relation to transport of goods by road and issues consignment notes, by whatever name called.

In the present case, consignment notes have not been issued and so the activities cannot be said to be covered under ‘goods transport agency’ services.”

Thus, service tax liability could not have been fastened on the appellant under the reserve charge mechanism,” the bench concluded

[mohan sehgal]

SIr/Madam...

In continuation of GST UNDER RCM ON GTA<.> Please advise..

ABC are registered C&F Service Providers. ABC arrange different transporters(GTA)for transporting good of the principals to different destinations as directed by the Principals and pay the GTA their charges as per the consignment notes.All the freight charges paid for a particular month are then billed to the principals by ABS as C & F Services(SAC:996713) charging 18% GST on the whole amount.

IS THERE ANY OBLIGATION OF GST UNDER RCM ON GTA SERVICES ?? If yes,who has to pay the GST under RCM on GTA CHARGES??

THANKS

AI Summary

Reverse charge on goods transport agency services depends on whether the transaction is hiring or GTA determined by consignment notes. Whether payment for a lorry hired from a related concern attracts reverse charge under GST depends on whether the supplier is a goods transport agency-typically shown by consignment notes-and on contract terms; if it is merely vehicle hire, RCM is not applicable. Distinctions affect applicable tax rate and ITC: GTA services may be taxed under reverse charge with ITC limitations or under forward charge with normal ITC, and certain notifications exempt hiring to a GTA or treat ''right to use'' differently, so agreement terms and consignment documentation determine RCM liability.