TaxTMI 
TaxTMI 
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?
Goods Transport Agency
21 Jan 2022 
7 Replies 
2576 Views Asked by
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. (AI Summary)
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. (AI Summary)