Dear Sir,
We are a manufacturer and we purchase raw materials that are sent to our factory via a lorry. We have hired the lorry and paid the driver for the transportation services.
We are unsure whether this transaction falls under the category of GTA services. If it is classified as GTA services, we are also unsure whether RCM is applicable in our case.
Could you please advise us on whether this transaction is classified as GTA services and whether RCM is applicable?
Thanking your Sandeep
Hiring Lorry for Raw Material Transport: No Consignment Note Means No GST Under RCM; ITC Possible with Documentation A manufacturer inquired whether hiring a lorry for transporting raw materials to their factory falls under Goods Transport Agency (GTA) services and if Reverse Charge Mechanism (RCM) applies. An expert clarified that a consignment note is essential for a service to be classified as GTA. If no consignment note is issued, the service is not considered GTA and may be exempt from GST. Several participants agreed with this explanation, suggesting that if no consignment note is issued, the manufacturer could avoid paying GST under RCM. However, if a consignment note or equivalent documentation is provided, GST should be paid under RCM, allowing for Input Tax Credit (ITC) claims. (AI Summary)
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