RCM on freight paid for paddy straw

[KARAN VERMA]

Sir, whether RCM applicable on freight paid for paddy straw ?

AI Summary

Reverse Charge Mechanism under GST applies to freight on paddy straw; not exempt as agricultural produce. A discussion on the applicability of Reverse Charge Mechanism (RCM) under Goods and Services Tax (GST) for freight paid on paddy straw concluded that RCM is applicable. Paddy straw, being the outer covering of paddy, is not considered food grain or agricultural produce since it results from a milling process. Consequently, it does not qualify for transportation exemptions applicable to agricultural produce. According to Notification No. 13/2017 CTR, agricultural produce must be unprocessed or processed without altering its essential characteristics. If services of a Goods Transport Agency (GTA) are used, liability under RCM arises.