regarding payment of RCM on freight charged on invoice

[FARIDUDDIN AHMAD]

respected sir, supplier of goods has paid advance Rs-30000/- freight to the transporter of goods, against the freight Rs-36000/(no GST charged by the transporter on freight)-mention in the document issued by the transporter to the recipient of goods and the supplier mention the advance freight rs-30000 paid to the transporter in its Tax invoice issued to the recipient of goods, but does not charged any GST on the advance freight paid to the transporter. remaining balance of Rs-6000/- has been paid by the recipient of the goods.my query is whom does the liability of RCM arise, recipient or supplier.

[Kiran Tahelani]

to the best of my knowledge,

the person who is booking freight expense in his books of account and who is liable to pay freight will be liable for the gst under rcm (internal arrangements can be anything)

Experts may correct me if i am wrong.

[Shilpi Jain]

What is the arrangement between buyer and seller? The RCM liability is on the recipient. Recipient is the person who is liable to pay the consideration. So if the GTA issues invoice for full amount to the buyer then he is the person who is liable to pay the consideration and thereby he would be liable to pay the tax under RCM.

[Shilpi Jain]

So you will have to provide further facts on what is the understanding between buyer and seller and on whom the invoice is issued.

[Alkesh Jani]

Dear Experts,

As per the query raised, can we apply provisions of Section 31 of CGST Act, 2017 and as advance is paid by the supplier, he becomes liable for payment of Tax and Rs.6000/- paid by the recipient will be adjusted by way of commercial Credit or Debit Note?

Thanks

AI Summary

Reverse charge on freight hinges on who is contractually liable to pay the transporter and treated as recipient. Dispute over reverse charge liability where supplier paid an advance to the transporter and recorded it in its invoice without charging GST, while recipient paid the balance; RCM liability follows the party contractually liable to pay consideration or who is treated as recipient in the invoicing, and an advance paid by the supplier does not automatically transfer RCM liability absent agreement or invoicing to that effect; adjustments by credit or debit note depend on tax invoicing and accounting treatment.