Applicability of Reverse charges on Government RTA taxes

[Ravikumar Doddi]

Dear sir,

is there any reverse charge applicability on quarterly RTA tax on commercial vehicles used by the business entity for transportation of goods which fee was collected by the State Government. Department is asking to pay RCM on these. please clarify. I could not found exemption in NNo.12/2017(CTR) nor NNo.13/2017(CTR).

AI Summary

Reverse charge not triggered for state imposed vehicle RTA taxes absent a qualifying supply under GST valuation rules.
The query concerns whether State-collected quarterly RTA tax on commercial vehicles triggers reverse charge. The consensus is that the RTA levy is a tax, not a fee, and does not constitute a supply under the GST framework; activities by public authorities are excluded. Therefore, reverse charge is not attracted. Valuation rules that add taxes into the value apply only after an activity is established as a taxable supply and cannot convert a non-supply statutory tax into a supply.