RCM ON FREIGHT PAID FOR TRANSPORT TO NEPAL

[ROHIT GOEL]

DEAR SIR,

A manufacturer is shipping their goods from Haryana to Nepal via road. The transporter is issuing consignment note for transport service and not charging GST. My question is whether RCM is payable on such transport?

As per my understanding, as per section 13 of IGST Act, place of service is outside India but service supplier is located in India and as such it would be a Inter state supply liable to GST and thus RCM.

AI Summary

Debate on Reverse Charge Mechanism for GST on Freight to Nepal: Sections 12 & 13 IGST Act Discussed A discussion on the applicability of Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST) for freight paid on transporting goods from Haryana, India, to Nepal. The primary issue is whether RCM applies since the transporter does not charge GST. Experts debate the place of supply under sections 12 and 13 of the IGST Act, considering the transaction as an interstate supply. Some argue that the service is zero-rated as it involves export, while others believe RCM applies because the manufacturer pays the freight. The consensus is that IGST is payable under RCM, and input tax credit (ITC) is available, despite potential complications due to the place of supply being outside India. The discussion highlights the need for clarity on contractual terms and suggests that the manufacturer should pay IGST and claim ITC.